Volvo Construction Equipment (Volvo CE) has announced that it sustained strong profit margins in the third quarter of 2024, despite facing a downturn in market conditions across Europe and North America.
The company reported a 23% year-over-year decline in net sales, totaling SEK 18,809 million (€1.6 billion), with machine sales dropping by 24%. In a positive development, service sales increased by 2%, indicating a rising demand for digital solutions. Notably, order intake surged in South America (59%) and Europe (44%), even as demand softened in other regions.
The third quarter also saw a 5% growth in China’s construction market, driven by government initiatives, while South America experienced similar growth of 5%. In contrast, Europe’s market declined by 25% from last year’s highs, and North America faced a 9% decrease as dealer inventories adjusted. Meanwhile, Asia—excluding China—experienced a slight contraction of 2%, influenced by government revisions in countries like Turkey.
Melker Jernberg, Head of Volvo CE, acknowledged the turbulent market conditions, stating, “We are living in turbulent times and, like other companies, are feeling the effects of a market slowdown. But we are maintaining our leading position with a strong portfolio, the continued roll-out of new products and services, and our steadfast commitment to the industry transformation.”
Jernberg emphasized that the company’s long-term ambitions remain unchanged, highlighting a commitment to balance current priorities with a vision for the future.
In the same quarter last year, Volvo CE noted that the total machine market contracted significantly, primarily due to a slowdown in Europe. This contraction was characterized by a 25% decline from historically high levels, attributed to low business confidence and a saturated end market. North America similarly saw a 9% decrease due to normalization in dealer fleet replenishment and reduced end-customer demand.
In Asia, excluding China, the overall market dipped by just 2%, despite growth in nations like India, Indonesia, and the Middle East. Countries like Turkey faced challenges, partly due to revised government infrastructure investments.
Conversely, the Chinese market grew by 5%, propelled by government policies aimed at stimulating the real estate sector, while South America saw a 5% increase in market development, bolstered by strong demand in Brazil, Peru, and Chile.
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