Gdansk — Swedish truck maker Volvo reported higher than expected quarterly earnings on Thursday, as signs of recovery in Europe helped it offset sluggish demand in North America.
Truck orders in North America have fallen more than 40% in recent months compared with last year, adding to the pressures on pricing and sentiment across the sector.
The second quarter was characterised by a general stabilisation of the European market, contrasted by more uncertainty and a wait-and-see mode among customers in North America, Volvo said.
“The results are better than feared, but the heat does appear to be coming out of Europe,” analysts from Jefferies said in a research note.
The downturn in North America is likely to last for quarters, CEO Martin Lundstedt said, though there might be a positive pre-buy effect next year if new US emissions rules become clearer. Those rules could make trucks more expensive and harder to maintain from 2027.
Import-related costs
Analysts have said that Volvo, which makes vehicles under brands such as Mack Trucks and Renault as well as its own name, looks better positioned than its peers to weather US tariffs as it builds a larger share of its trucks locally, reducing its exposure to import-related costs.
Volvo’s truck order intake was similar to last year’s at 47,761 vehicles, while deliveries fell 10.5% to 52,764 vehicles. Analysts from JPMorgan said they expected deliveries to improve in Europe in the second half of 2025.
Lundstedt said he was “rather confident” that the recovery in Europe would continue, as Volvo had a full order coverage through the third quarter and bookings were also coming in for the fourth.
Future tailwinds from infrastructure and defence investments should also help the business in Europe, he said.
Volvo’s operating profit, excluding currency exchange effects and one-off charges tied to lower battery volume commitments and asset impairments in its electric vehicle operations, fell to 13.5-billion krona in the second quarter. Analysts polled by LSEG had expected 13.3-billion on average.
The Volvo shares, which jumped more than 3% in early trading, were broadly flat in morning trade. Reuters
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