Volvo Group Q1 Profit Falls 30% Amid US Tariff Uncertainty
Swedish truck manufacturer Volvo Group has reported a sharp 30% drop in net profit for the first quarter of 2025, attributing the decline to reduced vehicle sales and growing trade uncertainties—particularly from the United States.
The company revealed that vehicle sales dropped by 9%, blaming heightened concerns around international tariffs and shifting global trade policies.
“Recent tariffs and other trade restrictions imposed or considered by the US and other countries have significantly increased uncertainty about trade conditions,” the company stated.
Volvo admitted the situation remains unpredictable and could affect its operations more severely than those of its competitors.
US Tariffs Impact Forecast and Supply Chains
While all Volvo vehicles for the US market are produced domestically within the United States, the tariffs may affect key components sourced from other regions.
As a result, the company lowered its full-year forecast for US heavy-duty truck sales by 25,000 units, now estimating 275,000 trucks for 2025. The projections for Europe and China remain unchanged.
The company’s net profit for the first quarter stood at 9.98 billion kronor (approx. $1.03 billion)—a significant fall from the 14.1 billion kronor recorded during the same period last year.
Lower Margins and Sales
- Operating profit dropped by 27% to 13.2 billion kronor
- Operating margin declined from 13.8% to 10.9%
- Net sales (adjusted for currency effects) fell 7% to 121.8 billion kronor
- Truck deliveries decreased by 12%
The uncertainty surrounding emissions regulations and trade restrictions has led many US customers to delay purchases, awaiting more clarity.
Positive Outlook on Orders
Despite the lower profits and sales figures, order intake grew by 13%, totaling 55,227 trucks for the quarter. This signals a potential recovery if global trade tensions ease in the coming months.
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Volvo Group Q1 Profit Falls 30% Amid US Tariff Uncertainty