Citing strong second-half 2020 recovery and rising global infrastructure demand, Volvo Construction Equipment says it realized a 23% Q1 net sales increase over the same period last year. This puts the quarter slightly higher than the pre-pandemic Q1 2019. Order intakes for the quarter are also in sharp rise, showing a 73% increase.
Leading the way in global demand was China, Volvo CE says. Governmental infrastructure investments there along with sales increases in all global markets helped Volvo reverse Covid-19's negative impact, the company says. Volvo CE also saw worldwide deliveries increase by 53% in Q1. Deliveries across all regions rose, led by demand for large and medium-sized machines.
Another contributing factor to the quarter's increase in sales was the low level of dealer inventory, prompting restocking orders, Volvo CE says.
Semiconductors remain issue
Volvo CE's parent Volvo Group reiterated its concerns over the semiconductor shortage.
In March, Volvo Group said the global shortage of semiconductors would have a "substantial impact" on its production of trucks in the second quarter. The shortage could also likely affect production in other groups, including construction equipment.
"The global supply chain for semiconductors as well as for other components remains very unstable and the uncertainty about the development is high," says Martin Lundstedt, president and CEO, in Volvo Group's Q1 report. "We can therefore not rule out further disruptions in both the truck business and other parts of the Group."
North America's year-over-year comparisons will be impacted by the inclusion of March 2020, when the Covid-19 pandemic started to significantly impact the U.S. economy. Net sales in North America increased by 16%, Volvo CE says, with infrastructure spending proposals creating positive customer sentiment.
Volvo CE says its China market development is up 142% in the first two months of the year, compared to last year when the country was experiencing Covid-19 lockdowns. As a whole, the company's Asian markets saw year-over-year net sale increases of 35%. In addition, European net sales increased by 12%, South American sales went up 21% and and Africa and Oceania sales increased 19%
"We can take confidence that we have weathered a tough period for our customers, our employees and the wider industry and are beginning to now see higher activity," says Melker Jernberg, Volvo CE president.