Falling sales in China impacts Volvo CE’s Q1 results
22 April 2022
Falling sales in China has seen Volvo Construction Equipment (Volvo CE) report a drop of 9% in overall global sales for the first quarter of 2022 to SEK 22.6 billion (US$2.37 billion) from SEK 24.7 billion (US$2.59 billion) in the first quarter of 2021.
The impact of the Covid-19 pandemic in China and the country’s lockdowns has had a significant impact on sales in the construction equipment industry’s largest market in the world, as has a price pressure that remains primarily on excavators. Sales for Volvo CE in China were down 33%.
In Asia, excluding China, sales were down 28% in the first quarter of 2022 compared to the same quarter last year. Sales in India have been negatively impacted by price increases on machines related to new emission regulations.
Volvo CE added that order intake had also felt the effect of a cancellation of orders in Russia and restrictive order slotting due to large order books, while effects from a strained supply chain led to deliveries decreasing by 33%.
Apart from Asia, other regions in the world saw growth – Europe was up 2%, North America 11% and Africa and Oceania 5%. South America reported the highest increase at 62%, highlighting the region’s recovery.
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 organisation 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.”
Volvo CE added that 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.