Volvo’s second quarter at a glance:
- Volvo Group’s net sales dropped 12% in the second quarter, with currency-adjusted sales down 5% to SEK 122.9 billion.
- Truck deliveries fell 18% in North America while orders were off by 16% and the company intends to reduce production capacity as a result.
- CEO Martin Lundstedt notes Volvo will continue to focus on earnings resilience by “staying close to customers, using our flexibility, keeping strict cost control and driving our service business.”
Volvo Group announced last month its net sales in the second quarter of 2025 were down by 12%, to SEK 122.9 billion, from 140.2 billion in the same quarter in 2024. When adjusted for currency movements sales were down 5%.
The company states adjusted operating income amounted to SEK 13,484 million, corresponding to an adjusted operating margin of 11.0%. In Q2 2025, a negative effect of SEK 4,512 million and a positive effect of SEK 989 million were excluded from adjusted operating income.
Volvo sees volatility across globe
“In a quarter characterized by a general stabilization of the European market and more of uncertainty and a wait and see mode among customers in North America, the Volvo Group's net sales declined by 5% adjusted for currency movements,” says Martin Lundstedt, president and CEO at Volvo Group.
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“Sales of vehicles were 6% lower than in Q2 2024 when adjusted for currency, while the underlying service development remained robust, supported by continued good utilization of vehicles and machines.”
He adds, “Our service sales were on the same level as in the previous year when adjusted for currency, and on a rolling 12-month basis revenues in our service business amounted to SEK 126.3 billion.”
Volvo’s tough report was followed by similarly soft earnings announcements by Traton (International), Daimler and Paccar.
Faltering North American truck demand hurts business
Lundstedt says deliveries in the company’s truck business were down 10% last quarter while order intake was on the same level as in the previous year. He notes demand in Europe has been stable, and following the good order momentum the company has had there in recent quarters, it has increased production capacity there to maintain good lead times to customers.
Unfortunately, “demand in North America has been weak in the wake of uncertainty surrounding both tariffs and the EPA 2027 emissions regulations, and we are in the process of reducing production capacity there to adapt to the lower demand,” Lundstedt states.
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Volvo reports deliveries in North America were off by 18% year over year in Q2 after falling by 10% in the first quarter. Orders also were off by 16% in second quarter, well beyond the 5% dip seen in Q1.
Operating margins shrink, flexibility a key goal moving forward
Overall, in Q2, net sales in the company’s truck business declined by 7% to SEK 81.7 billion adjusted for currency, with sales of vehicles decreasing by 9% and sales of services increasing by 2%. The adjusted operating margin was impacted by the lower volumes and amounted to 10.3%.
“In these uncertain times we continue to focus on our earnings resilience by staying close to customers, using our flexibility, keeping strict cost control and driving our service business. We have adjusted our battery-electric business to reflect the slower than anticipated adoption rate of zero-emission vehicles, but our 2040 net-zero ambition remains firm,” Lundstedt adds.
