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Swedish organization Volvo announced a 10% increase in its sales in the fourth quarter and positive monetary signs for the fourth quarter and 2023. But the maker of trucks, buses and structural appliances advised slowing down its sales this year, as a result of a suppressed pandemic. because it has been largely fulfilled.
Volvo reported net income of $1. 16 billion, or 59 cents per diluted share, in the final three months of 2023, up 80. 6% from $641. 4 million, or 31 cents, in the year-ago period.
For the full year 2023, Volvo increased net sales by almost 80 billion Swedish kronor (SEK) ($7.65 billion) to SEK 553 billion. Adjusted operating income of SEK 77.6 billion compared to SEK 50.5 billion in 2022 for an adjusted operating margin of 14% compared to 10.7% a year earlier.
“Coming into 2024, the market is moving from high demand to a more normal replacement-driven market,” CEO Martin Lundstedt told analysts on a conference call.
Volvo’s global truck deliveries rose four to 65,625 in the fourth quarter. Orders fell 9% to 49. 347 units.
A six-week strike led by the United Auto Workers at Mack Trucks resulted in a 9% drop in deliveries from last year. Mack’s orders soared 72% in the October-December period.
Sibling Volvo Trucks North America reported 31,013 orders, down 17% from 37,210 units in Q4 2022. Deliveries rose 2% to 39,964 compared to 39,128.
Fleets have largely absorbed the cumulative needs for the years 2022 and 2023, the company said. Delays, especially in Europe, have returned to more general levels.
Bookings for fully electric trucks in Q4 declined by 7% to 1,090 vehicles. Deliveries increased by 127% to 1,285 vehicles.
“The underlying electric demand is good, and we have high quotation levels across regions,” Lundstedt said. “At the same time, we experienced [some] hesitation to take in new orders from the customer side. There is a little bit of wait-and-see mode that we think is rather natural.”
In the U. S. , California’s Advanced Clean Fleet rule, scheduled to be implemented on Jan. 1, has been delayed due to legal wrangling. This may cause some fleets to think about transitioning to electric trucks that are two to three times more expensive than traditional diesel-powered models.
“It’s just going to be a hotline,” Lundstedt said. But we’re seeing that this transformation is just beginning. “
Volvo is preparing for the long-term growth in electric vehicles toward its goal of eliminating 100% of fossil fuel-powered trucks by 2040. It paid $210 million to purchase the battery-making assets of Proterra Powered out of Proterra Inc.’s bankruptcy during Q4.
“This is the first step toward creating a battery chain for the organization in North America,” Lundstedt said. “But it also increases the overall battery capabilities of the organization. “Volvo expects the deal to close this quarter.
Since all Volvo truck factories in Europe mass-produce electric trucks, the company can accommodate a mix of styles between traditional and electric trucks.
Volvo earlier this week unveiled a new lineup of four VNL models that will go into production in the third quarter of this year in Virginia. The truck’s platform shape, which has been in development for six years, will form the basis of long-term trucks around the world. world, adding a redundant chassis in autonomous conditions.
The board of directors of the Gothenburg-based company has proposed a dividend of SEK 7. 50 according to the corresponding percentage and an additional dividend of SEK 10. 50 according to the corresponding percentage.
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Click for more FreightWaves articles by Alan Adler.
Volvo Group reports fourth-quarter results, but caution for 2024 seems to be the first at FreightWaves.