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Volvo Group – 2017 1st Quarter


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Volvo Group Press Release  /  April 25, 2017

  • In Q1 2017 net sales increased by 8% to SEK 77.4 billion (71.7). Adjusted for currency movements and acquired and divested units sales increased by 4%.

  • Adjusted operating income amounted to SEK 7,029 M (4,459), corresponding to an adjusted operating margin of 9.1% (6.2).

  • Currency movements had a positive impact on operating income of SEK 289 M.

  • Operating cash flow in the Industrial Operations amounted to SEK 1.5 billion (-10.4).

  • UD Trucks launched all-new heavy-duty Quon and medium-duty Croner truck ranges.

  • New Volvo VNR regional haul tractor launched in North America.


Continued improved profitability

In the first quarter, both the Group’s sales and profitability increased. Net sales increased by 8% and amounted to SEK 77.4 billion. Volumes of heavy-duty and medium-duty trucks were down by 4%, which was off-set by 34% higher volumes of construction equipment. The good order trend from the end of last year continued, with order intake for trucks being up by 11% to 55,600 vehicles and order intake for Volvo CE rising 34% to 17,500 machines.

The trend with increased services sales also continued with a positive development in all segments and markets. Sales of services grew by 6% currency adjusted, driven by increased focus in our sales and service operations as well as high fleet utilization for our customers.

The Group’s adjusted operating income improved to SEK 7.0 billion, with earnings improvements coming from all business areas with the most significant impact from Trucks and Volvo CE. The adjusted operating margin was 9.1%.

Demand for trucks in Europe remained high. Our customers continue to benefit from a good freight environment and we see good demand also in the construction segment. When it comes to market shares, we have started the year well, noting a 17.6% share for Volvo and Renault Trucks growing to 8.7%.

After the downwards correction in the long haulage segment in 2016, the North American market seems to be bottoming out. We see positive signs of increased order activity. In April, Volvo Trucks launched the new Volvo VNR regional haul tractor, marking the first step in the renewal of the Volvo range in North America. With its modern, ergonomic and more aerodynamic cab, the new vehicle will significantly improve Volvo’s position in the regional haul market. Product features are focused on delivering the maneuverability, productivity and safety that are so important to customers in this segment.

Demand for trucks in Japan remained at a high level. With the launch of new heavy- and medium-duty truck ranges with associated services, UD Trucks takes important steps in strengthening its product portfolio. The all-new heavy-duty UD Quon delivers higher levels of performance across features compared to its predecessor and also addresses a broader market by catering to a wider range of customer applications. In addition, UD Trucks extended its product offer aimed specifically at growth markets by complementing the UD Quester heavy-duty range with the all-new UD Croner range of medium-duty trucks.

The first quarter also saw growing truck markets in India and China. Both our joint-ventures, VECV and DFCV, increased sales as well as profitability, contributing to the improved earnings for the Group’s truck business.

It is also great to note that the European truck segment in Asia is growing, with a 41% volume increase for Volvo Trucks, which holds a strong position in this segment. This development is fuelled by higher commodity prices, which has sparked a recovery in the mining industry as well as a rapid growth of e-commerce in China. Customers operating in these industries value the uptime and productivity that our Volvo trucks deliver.

All in all, the improved performance in our trucks business resulted in an operating margin of 9.9%.

The recovery in the mining industry is good also for Volvo CE. After years of tough market conditions, the Volvo CE business is growing again, with a sales increase of 30%. Higher sales volumes linked with increased internal efficiency and a lower cost base resulted in an operating margin of 10.0%. Volvo CE is on the right track with the performance improvement plan yielding results. However, we see further opportunities to structurally improve the long-term competitiveness of Volvo CE.

Volvo Buses delivered 10% fewer buses and had an operating margin of 1.8%, which was a slight improvement.

Volvo Penta grew sales by 15%, while maintaining an operating margin of 15.5%. The Volvo Penta team continues to successfully drive and develop the industrial engine business.

Volvo Financial Services’ credit portfolio continued to perform well with low credit losses. Operating income increased and VFS had a return on equity of 13.8%.

With the new truck ranges launched this quarter, we take an important step in strengthening our product portfolios in North America, Japan and growth markets in Asia. Our strategy, with brand and business area driven organizations with decentralized accountability, is developing well with an increased focus on driving the service business. We are becoming a faster and more agile organization that is closer to customers.

Martin Lundstedt

President and CEO


Report on the first quarter 2017(PDF, 0.7 MB)

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The Numbers

In Q1 2017, sales (deliveries) from Volvo Group’s truck operations amounted to 43,927* units, down 5 percent from 46,110 units in Q1 2016.

Volvo brand Q1 2017 truck sales (overall) fell to 23,720 units globally, down 2 percent from 24,315 units in Q1 2016.

Volvo brand Q1 2017 truck sales in North America plunged to 3,484 units, down 40 percent from 5,797 units in Q1 2016. This follows a 49 percent sales decline in Q4 2016 versus Q4 2015, and another 49 percent sales decline in Q3 2016 versus Q3 2015.

Volvo brand Q1 2017 truck sales in Europe rose to 13,325 units, up 4 percent from 12,852 units in Q1 2016.

Volvo brand Q1 2017 truck sales in Africa/Oceania (includes Australia, New Zealand) rose to 1,105 units, up 1 percent from 1,095 units in Q1 2016.


Mack brand Q1 2017 truck sales (overall) fell to 3,925 units globally, down 24 percent from 5,176 units in Q1 2016. This follows a 46 percent sales decline in Q4 2016 versus Q4 2015.

Mack brand Q1 2017 truck sales in North America fell to 3,530 units, down 27 percent from 4,843 units in Q1 2016. This follows a 42 percent sales decline in Q4 2016 versus Q4 2015.

Mack brand Q1 2017 truck sales in South America fell to 140 units, down 4 percent from 146 units in Q1 2016.

Mack brand Q1 2017 truck sales in Africa/Oceania (includes Australia, New Zealand) rose to 255 units, up 37 percent from 186 units in Q1 2016.


Renault Truck Q1 2017 brand sales (overall) rose to 11,533 units globally, up 3 percent from 11,222 units in Q1 2016.

Renault Truck Q1 2017 brand sales in Europe rose to 10,277 units, up 2 percent from 10,065 units in Q1 2016.


UD (Nissan Diesel) Q1 2017 brand sales (overall) rose to 4,749 units, down 12 percent from 5,397 units in Q1 2016.

UD (Nissan Diesel) Q1 2017 brand sales in Asia rose to 3,938 units, down 10 percent from 4,394 units in Q1 2016.


Total Global Deliveries by Brand

                                  Q1 2017          Q1 2016          % Change       

Volvo                           23,720             24,315               -2

Renault Trucks             11,533            11,222                 3

UD (Nissan Diesel)      4,749               5,397                -12

Mack                            3,925               5,176                -24

Total Deliveries          43,927            46,110                -5


Total Global Deliveries by Truck Size

                                                       Q1 2017          Q1 2016          % Change       

Heavy Duty (>16 metric tons)        36,764             38,282                  -4

Medium Duty (7-16 metric tons)     3,548               3,765                   -6

Light Duty (<7 metric tons)             3,615               4,063                 -11

Total Deliveries                            43,927             46,110                   -5


Total Global Deliveries by Region

                                  Q1 2017          Q1 2016          % Change       

Europe                        23,602             22,917                 3

North America             7,065             10,740               -34

South America             1,889               1,890                  0

Asia                              8,470               7,854                  8

Africa & Oceania*       2,901               2,709                  7

Total Deliveries          43,927            46,110                -5

* includes Australia, New Zealand

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Renault Trucks’ global sales results.....versus the Volvo brand:

January 2015              Renault up 24%           Volvo down 4%

February 2015            Renault up 26%           Volvo down 13%

1st quarter 2015         Renault up 35%           Volvo down 8%

April 2015                   Renault up 12%            Volvo up 9%

May 2015                    Renault up 5%              Volvo down 1%

2nd quarter 2015        Renault up 7%              Volvo down 4%

July 2015                     Renault up 8%              Volvo down 5%

August 2015               Renault up 60%           Volvo down 6%

3rd quarter 2015        Renault up 20%           Volvo down 2%

October 2015              Renault up 16%           Volvo down 1%

November 2015          Renault up 54%           Volvo down 10%

4th quarter 2015         Renault up 29%           Volvo down 7%

Full Year 2015             Renault up 22%           Volvo down 4%

1st quarter 2016         Renault up 8%            Volvo down 8%

2nd quarter 2016        Renault up 12%           Volvo down 9%

3rd quarter 2016        Renault down 5%         Volvo down 12%

4th quarter 2016        Renault down 5%          Volvo down 8%

Full Year 2016             Renault up 2%               Volvo down 9%

1st quarter 2017         Renault up 3%               Volvo down 2%

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