Swedish heavy-duty manufacturer Volvo Group saw its net profit fall 23% year on year in the third quarter to 5.723 billion crowns (550 million euros). This decrease is the consequence of a drastic reduction in the order book in the previous quarter.
In question, the epidemic of new coronavirus even if, "towards the end of the quarter, the transport activity was about the same level as a year ago in most markets", noted Martin Lundstedt, the general manager of the group, in the report presented four days ahead of the announced schedule.
Resumption of demand
Volvo saw a recovery in freight transport and truck use in the third quarter, which allowed many operators to "get back to their original fleet renewal programs"
Thus, European demand "gradually improved" after the periods of containment, the American market benefited from a rebound in volumes as well as transport prices. Conditions improved in Brazil, driven by the agricultural sector "after the good harvests", while the Indian heavy truck market continued to suffer from restrictions imposed in the fight against the pandemic.
The Chinese market has remained "strong", thanks to subsidies supporting the replacement of trucks that do not meet the new CN3 emission standards and "government initiatives to support the economy".
Return of orders
Volvo strengthened its presence in China, with a 47% increase in orders in the quarter. From July to September, sales also fell 20% year on year to 76.9 billion crowns, weighed down by a 26% drop in truck sales.
After the relaxation of restrictions put in place to curb the spread of Covid-19, freight activity has started to rise again with a return of customers while coaches continue to suffer with a low number of passengers transported. "A certain catching-up effect from the weak order book of the previous quarter had an impact on truck orders, which increased by 61% compared to a mixed third quarter last year," said Martin. Lundstedt. The public transport sector is doing better, the managing director also commented.