The Swedish heavy truck manufacturer Volvo Group reported a 30% decline in net profit in the first quarter on Wednesday, while car sales dropped 9% as a result of trade tariff uncertainties.
“Uncertainty regarding trade conditions in markets where the Group is present, as well as in relation to global and regional supply chains, has significantly increased due to recent tariffs and other trade restrictions imposed or believed to be imposed by the US and other countries,” the Volvo Group said in a statement.
Since the situation is dynamic and difficult to evaluate, it is impossible to forecast future events, possible effects on the Group, or whether trade restrictions will have a more negative effect on the Group than on its primary rivals.
All of Volvo Group’s automobiles are produced in the US, however production-related components may be impacted by tariffs.
While maintaining its outlook for Europe and China, the business said it has lowered its full-year prediction for heavy-duty vehicle sales in the US by 25,000 to 275,000.
As expected by experts surveyed by Bloomberg, Volvo Group’s first-quarter net profit dropped to 9.98 billion kronor ($1.03 billion) from 14.1 billion kronor in the same period last year.
Operating profit fell by 27 per cent to 13.2 billion kronor a year earlier, with the operating margin shrinking from 13.8 to 10.9 per cent.
Net sales fell by seven per cent, adjusted for currency movements, to 121.8 billion kronor, while truck deliveries fell by 12 per cent in the quarter.
Volvo Group said the uncertainty surrounding trade tariffs and US emissions legislation had caused US customers “to adopt a wait and see approach”.
Order intake was nonetheless up by 13 per cent in the quarter to 55,227 trucks.
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