ABOVE: Volvo CE reports good results despite challenges facing the construction sector
While order intake and deliveries have risen, and the total machine market has also grown – when compared to the same period last year – this second quarter was also impacted by a continuing decline in sales for Europe and North America due to market uncertainty.
Q2 has also been impacted by a 10% drop in both Europe and North America. In Europe, end customer demand remained somewhat saturated and increased dealer stock had yet to reach end customers, while the North American market declined due to repositioning of rental fleets as well as lower end customer demand due to market outlook uncertainty.
Volvo CE, however, has continued to strengthen its position by making several strategic moves over the last few months. These include an expansion of its crawler excavator footprint globally with investment in three main production sites: South Korea, Sweden and North America.
The company has also decided to divest its entire 70% stake in SDLG for SEK 8 billion to a fund predominantly owned by Lingong Group, and acquire Swecon’s operations in Sweden, Germany, and the Baltics, including Entrack for SEK 7 billion from Lantmännen. These are expected to close in the second half of the year.
“At a time of market uncertainty, we focus on staying closer to our customers than ever before, while maintaining a solid performance and investing in the future. These strategic agreements not only help us to meet growing customer demand, but with the addition of Swecon, our ambition is to own and manage the majority of our construction business in Europe, strengthening our total solution sales capabilities and service business in the region,” says Melker Jernberg, head of Volvo CE.
The Chinese market has also responded positively to recent government policies to stimulate the real estate sector, mainly driving demand for smaller machines. This has helped secure a 26% increase in market development for the region. South America has risen by 8% due to improved market sentiment in Argentina and Peru, while Asia excluding China has increased by 6% thanks to growth in Southeast Asia, the Middle East, Turkey and India.
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