Swedish truck manufacturer Volvo Group reported a sharp 30 percent drop in first-quarter net profit on Wednesday, as weakening global demand and rising trade tensions—particularly involving the United States—put pressure on sales and production.
The company attributed the decline primarily to a 9 percent decrease in vehicle sales and heightened uncertainty surrounding international trade policies. Net profit fell to 9.98 billion kronor ($1.03 billion), down from 14.1 billion kronor in the same quarter last year. Operating profit also took a significant hit, slipping 27 percent to 13.2 billion kronor, while the company’s operating margin narrowed to 10.9 percent from 13.8 percent a year earlier.
Volvo pointed to trade tariffs and other restrictive measures recently imposed—or under consideration—by the U.S. and other governments as a major contributor to the deteriorating outlook.
“Recent tariffs and other trade restrictions imposed or considered to be imposed by the United States and other countries have significantly increased uncertainty about trade conditions in markets where the Group is present, as well as in relation to global and regional supply chains,” the company said in a statement.
Although all Volvo trucks sold in the U.S. are manufactured domestically, the company warned that the tariffs could still disrupt production by affecting the supply and cost of imported components used in its American assembly plants.
In light of the challenges, Volvo revised its forecast for U.S. heavy-duty truck sales downward. The company now expects to sell 275,000 units in the American market in 2025, a reduction of 25,000 from previous projections. However, it maintained a stable sales outlook for its key markets in Europe and China.
Net sales for the quarter fell by 7 percent on a currency-adjusted basis, totaling 121.8 billion kronor. Truck deliveries also declined by 12 percent year-on-year, reflecting broader market softness and increased caution among customers.
The company highlighted a shift in buyer behavior, noting that American clients were becoming more hesitant amid the changing regulatory and trade environment. “The uncertainty related to tariffs and emissions regulations has led some customers in the U.S. to adopt a wait-and-see approach,” Volvo said.
Despite the overall downturn, there were signs of resilience. New truck orders increased by 13 percent in the quarter, reaching 55,227 units. This uptick in order intake suggests that demand could recover if macroeconomic conditions stabilize later in the year.
