European Truck Market Heads For Recovery After Short Pandemic Drop | Item

Paccar and Volvo Trucks are two of the six companies that dominate the European heavy truck market. We take a look at their financial performance and the way forward:


Paccar said customer demand for its trucks was “very strong” and truck deliveries increased sequentially in the first quarter of 2021, despite the limited supply of semiconductors affecting the automotive industry. In Q1 2021, the company achieved net sales and consolidated revenue of $ 5.85 billion, up 13.3% year-over-year (YoY), with sales increasing sharply, from 12.7%, for its key truck segment (42,200 new truck deliveries in the reported quarter, + 9.9% year-on-year), while an aftermarket segment reported revenue quarterly record, up 16.2% year-on-year.

Paccar said freight tonnage was high in the first quarter of this year as the US economy continued to recover, with trucks accounting for nearly three-quarters of the freight carried in the country, based on 2020 figures. Orders for Class 8 trucks from the company’s Kenworth and Peterbilt nearly tripled year-over-year in the first quarter of 2021 in the United States and Canada.

Earlier this year, Paccar also launched new models of heavy and medium trucks that offer better fuel efficiency and advanced driver assistance systems (ADAS). Importantly, DAF started manufacturing CF Electric trucks during the month of April. Kenworth and Peterbilt are expected to start production of zero-emission trucks in the coming months. In Q1 2021, Paccar began producing battery-powered electric customer trucks for applications such as port, waste and local deliveries. In these applications, the trucks return to the depots to recharge each day and have a range calibrated to optimize the weight and cost of the battery. Recently, on June 9, DAF announced the launch of a new generation of trucks, with improved fuel efficiency (up to 10% more fuel efficiency and an equivalent reduction in CO2 emissions), improved safety features. and additional comfort features for drivers. Production of this new generation of trucks is expected to start in October.

Volvo Group

The Volvo Group commented that the first quarter of 2021 was marked by a high level of activity among its customers, including a strong freight market, with an increase in volumes transported, driven by e-commerce, among other factors. As a result, the company’s customers realized higher freight prices and improved profitability, prompting them to expand their fleets to meet increased demand. As a result, there was a strong order intake in the Volvo Group’s truck segment. The company noted that inventories of new and used trucks were low globally and that the Volvo Group increased its deliveries by 17% year-on-year in the first quarter of 2021, also increasing its profitability (the margin of company operations having more than doubled to 12.8% in the first quarter of this compared to 6.8% in the corresponding quarter of the previous year). The Volvo Group noted that global semiconductor supply constraints had a limited impact on the company’s production in the first quarter of 2021, while the company expected to lose production equivalent to two to four weeks of production. international production, depending on the manufacturing site, in the second quarter of 2021 and other disruptions Cannot be ruled out. Recently, the press reported that the company was shutting down production at its Ghent plant for the week of June 21 due to a semiconductor shortage.

The Volvo Group said it continues to invest in electrified, automated and connected technology solutions and that the company already has fully electric trucks, buses and construction equipment in series production. Although volumes currently remain limited, customers are very interested in the products and with the expected deployment of heavy electric trucks by Volvo Trucks and Renault Trucks over the next two years, the group will offer electric trucks with ranges covering almost half of the transport by truck carried out in the EU. In the first quarter of 2021, the Volvo Group also established a new fuel cell joint venture called CellCentric in cooperation with Daimler Truck, with the aim of making it one of the world’s leading fuel cell manufacturers. In March, Renault Trucks presented its new ambitions in terms of electric mobility, targeting Renault Trucks’ all-electric offer for each segment – distribution, construction and long-distance transport – from 2023. In April, Volvo Trucks announced the sales of three new heavy-duty all-electric models will start later this year.

In the first quarter of 2021, the Volvo Group achieved sales of SEK 94,018 million, up 2.8% year-on-year on a reported basis, but up 13% after adjusting for movements in change, helped by a sharp increase in vehicle sales. Demand for trucks was wide across all segments in Europe and North America, with truck fleet utilization returning to pre-Covid-19 levels and demand for spare parts and services equally strong. The Chinese market grew strongly in Q1 2021, supported by subsidies to accelerate the replacement of vehicles that do not meet CN3 emissions standards. Sales in the Chinese market grew strongly compared to 1Q 2020, which was severely affected by Covid-19. Other important markets, including Japan, India and Brazil, also recorded positive momentum. Volvo Group’s total order intake was 85,461 trucks in Q1 2021, up 123% year-on-year, and deliveries were 52,444, up 17% year-on-year. In Europe, heavy and medium-duty truck order intake increased 126% year-on-year in the reported quarter (to 39,081), with deliveries of 18,871 (+ 10% year-on-year). North American truck order intake increased 369% to 22,215, with deliveries of 12,972 (+ 22% year-on-year). South America’s order intake and deliveries increased 27% and 13% year-on-year, respectively.

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