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Volvo Group hits Q2 trifecta of higher sales, profit and share gains

Swedish truck maker restricting orders and reducing backlog with more deliveries

Volvo Group improved its sales, profits and market share during the second quarter of 2022. (Photo: Jim Allen/FreightWaves)

Volvo Group checked the boxes for higher sales, profits and market share for its trucking business in the second quarter despite ongoing supply chain disruptions.

“Our customers in most regions are benefiting from high transport and infrastructure activity, which continues to drive good demand for our products and services,” Martin Lundstedt, Volvo president and CEO, said in an earnings report.

But order backlogs and lead times for new truck deliveries are long. That is forcing the Goteborg, Sweden-based maker of trucks, buses and construction equipment to restrict the number of orders it accepts. It has taken 7,000 to 8,000 orders out of the book-to-build system, a one and a half to two-week reduction.

The company has good momentum, especially in the service and parts business, Lundstedt said. 

Volvo Group restricting orders

Lower orders could result in fewer deliveries in coming quarters. However, orders in North America bucked the trend, rising 26% to 9,731 trucks. Deliveries increased by 53% to 15,073 vehicles.

Total order intake decreased by 8% to 53,388 trucks. Deliveries increased by 33% to 60,833 trucks. The order book for 2022 is almost full.


“We have seen continuous pressure in the supply chain, not only in the supply chain, but also in raw material costs and inflation in general,” CFO Tina Hultkvist told analysts Tuesday. “But thanks to good work in the commercial area, we have been able to offset this in the market in the quarter.”

Overall net sales in Q2 improved by 31% to Swedish Krona (SEK) 118.9 billion ($11.65 billion) Adjusted operating income rose to SEK 13.7 billion ($1.34 billion). The adjusted operating margin was 11.6% compared to 10.7% in the same quarter a year ago. Earnings per share amounted to SEK 5.14 compared to 4.38 a year ago.

Except for China, where COVID-19 lockdowns depressed business activity, Volvo reported strong truck demand in global markets as net sales increased 51%. 

“The truck fleet utilization rate remained on a high level, which drove demand for service,” Lundstedt said.  

Volvo market shares grew in most markets, including Volvo Trucks North America. Its share grew to 10.5% from 9.7% a year ago. Small sibling Mack Trucks’ share fell to 5.8% compared to 7.1% a year ago. Volvo Trucks’ total heavy-duty market share through May increased to 19.3% compared to a year-ago share of 15.1%.

“We should be humble in a situation like this and say that in a market dictated by supply it is an advantage if you have had the right type of supply chain collaboration that we have seen,” Lundstedt said.

Electric truck orders up 5X year over year

Volvo pressed its leadership in electric trucks, recording 1,097 orders compared to 194 a year ago. It delivered 216 battery-electric units compared to 98 in Q2 2021. Its share of zero tailpipe-emissions trucks fell to 36.9% from 43.5% as the overall market expanded in the face of tougher emissions standards around the world.

During the quarter, Volvo began testing a hydrogen fuel cell-powered heavy-duty truck. The powertrain comes from cellcentric, its fuel cell joint venture with rival Daimler Truck.  

“We aim to lead the transformation and provide increased value for our customers and embark the Volvo Group on a growth journey driven by electrification, autonomous solutions and new productivity services,” Lundstedt said.

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.