Volvo Q3 Profit Falls 28.5% on Market Downturn, Mack Issues

Volvo Group reported a significant 28.5% drop in profits for the third quarter of 2024, largely due to a decline in demand for trucks in both Europe and North America. The company's profit fell to $956.6 million, down from $1.34 billion a year earlier, while revenues dropped 12% to $11.1 billion. CEO Martin Lundstedt noted that demand is normalizing after a peak the previous year, shifting toward replacement-driven markets. Order intake in North America saw a dramatic decrease of 50% compared to the same quarter last year, with issues like long lead times affecting Mack's vocational products. Delivery volumes also plummeted, attributed to supply chain disturbances. Lundstedt expressed optimism regarding the acquisition of a cab supplier to address these supply chain issues, stating this move should help improve production rates and service for Mack, which has experienced significant challenges in fulfilling orders. An expert opinion highlights the importance of supply chain resilience in the transportation sector. The acquisition strategy employed by Volvo Group is indicative of a broader industry trend where companies are increasingly verticalizing to consolidate supply chains and reduce dependence on external suppliers. This can potentially enhance operational efficiency and better respond to fluctuations in market demand, particularly in a landscape marked by ongoing disruptions.