Excluding China, where sales were down 1%, Volvo Construction Equipment says demand for its equipment is up, with infrastructure investment and revenue from services driving growth.
The company reported a 5% sales increase during the fourth quarter of 2021 to SEK 21,812 M ($2.3 billion) compared with the same period a year ago. In addition, full year sales rose as global markets continued to bounce back from the disruptions of 2020. For 2021, net sales totaled SEK 92,031 M ($9.7 billion) – up from SEK 81,453 M ($8.6 billion) from last year. Global order intake decreased by 24%, and deliveries decreased by 18% for the final quarter, primarily impacted by declines in China.
Volvo says the ongoing slump in China, the world’s biggest construction equipment market, is due to a saturated excavator market following last year’s high sales levels and an overall slowdown in construction and infrastructure investments across the region.
Commercial real estate and strong housing construction drove 23% growth in North America, while South America’s increase of 65% was largely driven by a high demand for commodities. Demand also remained high in Europe (27%) thanks to infrastructure investment and a recovery in the rental segment. Outside of China, all other regions in Asia we’re up 19%, with Korea and Southeast Asia performing particularly well.
“The industry continues to be confronted by the effects of the ongoing Covid-19 pandemic in combination with additional challenges such as transport disruptions, global component shortages and an overwhelmed supply chain,” says Volvo CE President Melker Jernberg.
“Yet thanks to the dedicated work of my colleagues, partners and suppliers, we have continued to deliver good profitability and took several important steps forward in our efforts to lead the transition to a carbon-neutral construction industry. The greater flexibility, digitalization and innovation across our products and services – not forgetting the stringent targets we have set ourselves in building a better world – have contributed towards a solid performance for 2021.”
Volvo also used the opportunity to cite several product advancements, including the first shipment of its 20-ton EC230 electric excavator for the Asian market. Volvo says 321 compact electric machines were sold in the last year, as the company continues to bet on an electric future. In addition, the reveal of a new concept autonomous electric wheel loader, the LX03, also showcased the company’s commitment to decarbonization.