Mon April 25, 2022 - National Edition Volvo Construction Equipment

Volvo Construction Equipment (Volvo CE) saw a modest increase in net sales for Q1, 2022 in all areas outside of Asia — with its overall growth momentum impacted by the market decline in China, triggered in part by the ongoing COVID-19 restrictions there.

The ongoing pandemic in China has had a significant impact on sales in the construction equipment industry's largest market in the world, leading to a drop of 9 percent in overall global sales for the first quarter of 2022. However, all other regions have played a strong role in softening the impact by demonstrating a steady increase in sales for the first three months of the year, with South America reporting the highest increase of 62 percent, North America rising 11 percent, Africa and Oceania 5 percent and Europe 2 percent.

Further illustrating the escalating importance of service solutions, service sales also have increased by 17 percent.

Melker Jernberg, president of Volvo CE, said, "There can be no doubt that the industry and the wider world itself is in the midst of extremely challenging times, but I am proud that we as an organization are tackling these issues head on — supplying our customers with the products and services they need today, while focusing on the tragic humanitarian crises going on around the globe and taking action on urgent climate change.

"During this difficult period, we are keeping up the speed of transformation to more sustainable construction and infrastructure solutions, helping to decarbonize value chains, all the while safeguarding our communities around the world."

During Q1 2022, Volvo CE saw net sales decrease to SEK 22,613 M from SEK 24,742 M in Q1, 2021. Adjusted operating income amounted to SEK 2,810 M (SEK 3,822 M in Q1, 2021), corresponding to an adjusted operating margin of 12.4 percent, down from 15.4 percent. The operating income has been negatively affected by lower machine volumes and higher material costs, which were partially mitigated by improved price realization and higher service volumes.

The elevated levels of order intake from the same period last year as the world recovered somewhat from the impact of the pandemic, has meant there has been a drop in order intake for Q1, 2022 — declining by 42 percent.

While mainly due to the continued decline in China, order intake also has felt the effect of a cancellation of orders in Russia and restrictive order slotting due to large order books. Effects from a strained supply chain also have led to deliveries decreasing by 33 percent.

The European market grew by 13 percent in the first two months of the year, influenced by a large number of investments in infrastructure and housing, while North America increased by 20 percent due to the high levels of housing construction and manufacturing in the region.

Due to the strong demand for commodities, South America has continued its robust rise in market demand with a 45 percent increase on the same quarter last year. However, all of this has been affected by a 33 percent decline in the Chinese market, primarily due to a spike in COVID-19 cases that has led to restrictions and lockdowns across the country, but also due to a price pressure that remains primarily on excavators.

Asia outside of China also has been negatively impacted by price increases on machines in India, related to new emission regulations, and has reported an 8 percent fall.

Volvo CE is demonstrating a solid performance during challenging times, while also continuing its evolution as a sustainable leader, not just for the company but for the industry and society as a whole. This quarter marks the successful launch of its first fully electric machine in the Asian market — the ECR25 Electric compact excavator — now available for customers to buy in South Korea and the introduction of a tailored CO2 Reduction Program aimed at helping customers realize their own unique goals towards carbon neutrality.

For more information, visit www.volvoce.com.

Preservation Methods Protect Construction Materials From Effects of Climate Change

Lane Construction Extends Austin Toll Road

Sunken Antarctic Research Vessel Being Demolished in Washington State

PowerVac Allows for Excavation Without Vacuum Truck

ARTBA Foundation Announces 2022 Hall of Fame Class

American Cancer Society Hosts Big Dig Northern Colorado

Fisher Introduces New Line of Storm Boxx Pusher Plows

Fay, S&B USA Construction Reconnects Hill District, Pittsburgh's Downtown

Construction Equipment Guide 470 Maryland Drive Fort Washington, PA 19034 800-523-2200

Construction Equipment Guide covers the nation with its four regional newspapers, offering construction and industry news and information along with new and used construction equipment for sale from dealers in your area. Now we extend those services and information to the internet. Making it as easy as possible to find the news and equipment that you need and want.

Contents Copyrighted 2022, by Construction Equipment Guide, which is a Registered Trademark, registered in the U.S. Patent Office. Registration number 0957323. All rights reserved, nothing may be reprinted or reproduced (including framing) in whole or part without written permission from the publisher. All editorial material, photographs, drawings, letters, and other material will be treated as unconditionally assigned for publication and copyright purposes and are subject to Construction Equipment Guide’s unrestricted right to edit and comment editorially. Contributor articles do not necessarily reflect the policy or opinions of this publication. Read our privacy policy here.