Trucking Market Expected to Slow in 2024: Volvo Lowers Forecasts

Summary

  • Trucking market predicted to face a tough year in 2024, according to industry and investors analysis.
  • Volvo projects a decrease in truck registrations, while European demand sees a downturn.
  • On the other hand, China’s medium and heavy truck market forecasts have been increased by Volvo.
  • Competitors, such as Daimler, cite supply shortages for slower sales growth.
  • Traton, meanwhile, commences 2024 favorably with a robust order book.

Outlook for the Trucking Industry in 2024

Both the trucking industry and investors are preparing for a challenging 2024, as Volvo anticipates lesser trucks to be registered and a slump in demand in Europe is suggested by analysts.

Last Friday, Volvo reduced its projections for the total European heavy truck market for this year, foreseeing registrations of 280,000 trucks in the region, as opposed to the initial 290,000. Nonetheless, the 290,000 forecast for the North American heavy truck market was retained.

Adjustments in Market Predictions

Positive adjustments were made in Volvo’s outlook for the China medium and heavy truck market, increasing it to 800,000 from the former 700,000 trucks.

In a statement by Volvo CEO Martin Lundstedt, he expressed that the company had effectively controlled cost inflation through price management, managed supply chain disturbances, and reduced inventories, observing a trend towards normalizing demand in multiple markets and segments.

Market Struggles and Successes

Other manufacturers in the trucking industry are also facing pressure. Daimler cited persistent supply shortages in key regions as the reason for a mere 1% full-year sales growth in 2023.

In contrast, Traton began 2024 on a high note, reporting a good order book early in the week.

Operational Profit and Dividend Proposals

Adjusted operating profit, considering divestment costs, came in at 18.4 billion Swedish crowns ($1.76 billion), surpassing the analysts’ average forecast of 17.2 billion in an LSEG survey.

The proposed regular 2023 dividend by Volvo is 7.50 crowns per share, an increase from 7.0 crowns in 2022. Additionally, an extra dividend of 10.50 crowns per share has been proposed, higher than the previous year’s 7 crowns. The proposed combined dividend of 18 crowns exceeded the total expected 17 crowns payout by analysts.

In terms of forex and trading impact, these market trends and Volvo’s financial performance can influence investment decisions and currency exchange rates, particularly in regions where Volvo and other truck manufacturers have a significant market presence.

PIP Penguin
Logo