Vehicle manufacturer Volvo has had a bad first quarter, reporting sales that were lower than expected.
The Chinese-owned Swedish company lowered its outlook for the North American lorry market, citing growing uncertainty around tariffs and their potential impact on global trade.
Net profit dropped to 9.89 billion Swedish krona (€0.91 billion) in the first quarter, down from 14.08 billion krona (€1.29 billion) a year earlier, as sales declined 7 per cent to 121.8 billion krona (€11.15 billion).
Lorry deliveries fell 12 per cent, although order intake rose 13 per cent, driven by stronger European demand.
Volvo reported a 9 per cent decrease in total vehicle sales.
Analysts had expected the company to post a net profit of 11.62 billion krona (€1.06 billion) on sales of 128.56 billion krona (€11.77 billion) for the first quarter, according to Visible Alpha consensus estimates.
Volvo now forecast the North American heavy lorry market at 275,000 new vehicles for the year, down from its January estimate of 300,000.
In Europe, the market outlook remained the same, with 290,000 new heavy lorries but the company said there was significant uncertainty.
CEO Martin Lundstedt said he believed the global tariffs issue was manageable so far.
“There is no panic,” he told Tidningarnas Telegrambyrå (TT), Sweden’s national news agency, on April 22.
“Logistics, transport and infrastructure will be needed in the future. 2025 has a number of challenging parameters, but we have a strong capability within the Group,” Lundstedt said.
“We are a global company. We have operations in well over 150 countries. So we are used to taking into account different types of changes in trading patterns,” he added.
Volvo noted that uncertainty around tariffs and emissions legislation has caused US customers to hold off on some purchases. The company also said it no longer anticipated any notable impact from new exhaust regulations that were expected to take effect in 2027.
It downgraded its 2025 forecast for lorry registrations in North America and Brazil but maintained its outlook for Europe, where it expected rising defence spending to gradually boost demand from the armed forces.
In the US, Volvo has signalled staff reductions, while in Sweden, the need for personnel was currently increasing as demand in other markets trended positively, according to Lundstedt.
He said the company was looking to optimise costs but had to work in line with the commercial conditions. “A certain part of this will be passed on to our customers and their customers,” he said.
At the opening of the Stockholm Stock Exchange on April 23, Volvo shares fell about 2 per cent.
“The divergence in trends between the US and Europe is becoming more evident,” Bernstein analyst Harry Martin said in a note, quoted by Reuters.
He added that the European lorry order intake grew 25 per cent in the quarter, while US orders expanded well below the quarter’s deliveries.
On April 18, Volvo announced that it would lay off up to 800 workers at three US facilities over the next three months, citing ongoing market uncertainty.
Swedish automaker Volvo Cars has scrapped its target of going all-electric by 2030, saying it now expects to still be offering some hybrid models in its line up at that time. https://t.co/eumn5Rgn8i
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