Quick Market Update: Volvo CE Is Down With 18% In North America

The equipment market is extremely unexpected. One moment it gives a promising figure about the market shares and the very next moment you may get to see some shares falling apart.

Volvo is a known brand and has been delivering reasonably good equipment for so long. Its market position is strong enough to navigate the tough and challenging market. However, this time it has also seen a significant drop in its net sales in the North American market. 

The surprising 18% drop is alarming and a warning sign for the OEMs that the uncertainty is something to take seriously this time. 

Despite an unexpected increase in orders, Volvo Construction Equipment (Volvo CE) has had a difficult start to 2025 in the North American market. 

The business is taking calculated steps to negotiate the difficult terrain as market conditions change and uncertainty grows.

Why there is a drop in sales in spite of higher orders?

Volvo CE’s North American net sales in the first quarter of 2025 dropped to $541.9 million, an 18% year-over-year decline. 

This decrease was also reflected in equipment deliveries, which dropped 18% to 1,430 units from 1,746 units in 2024.

Interestingly, Volvo CE witnessed a 12% growth in net order intake, booking 1,625 units compared to 1,446 units a year earlier, despite sales and deliveries uncertain. 

Instead of a greater market demand, the company credits this increase to a more stable heavy construction equipment supply and an alteration after last year’s high inventory levels.

Market pressure and repositioning of the fleet might be the cause

According to Volvo, the first two months of 2025 saw a 14% decline in the North American construction market as measured by unit sales. 

The outlook for the entire year is not much better, with estimates predicting a 5% to 15% drop by year’s end.

After a phase of rapid expansion, the decline is mostly the result of dealer and rental fleets normalizing. 

Whereas, activity has also been slowed down by changing consumer attitudes, cautious equipment fleet repositioning, and general market worries.

Volvo Group CEO Martin Lundstedt also mentioned increased tariffs as a future problem during the company’s results call.

Since a large portion of Volvo’s construction equipment in North America is imported from Brazil, South Korea, and Sweden, reducing the impact of these tariffs has taken on strategic importance.

Why electric equipment are in trend but global sales are down?

Globally, Volvo CE’s construction net sales fell from $2.4 billion in the first quarter of 2024 to $2.2 billion in 2025, an 8% year-over-year decline. 

The company’s adjusted operating margin fell from 16.1% to 12%, and its operating income plummeted 31% to $262 million.

But not all of the news was bad. Global orders for a number of equipment categories increased significantly, according to Volvo CE:

• Orders for large and medium-sized construction equipment increased by 23% to 12,218 pieces.
• Compact machines with 4,958 units were ordered, a 26% increase.
• Compact, all-electric equipment, orders increased 412% to 1,019 units.

Deliveries showed a similar trend, with deliveries of electric compact machines increasing 334% year over year.

Whereas, deliveries of large and medium equipment increasing 4%, and deliveries of small equipment increasing 16%.

How do the regional challenges affect Volvo’s sales?

Taking a broader view, the Volvo Group’s first quarter 2025 net sales came to $12.7 billion, a 7% decrease from $13.5 billion the previous year. 

All product categories and areas saw a decline in sales, with the exception of buses, which defied the trend.

The results of the first quarter demonstrate the ongoing volatility that characterizes the construction equipment industry, especially in North America. 

Companies like Volvo CE will need to remain flexible and creative in order to sustain consistency for the remainder of 2025, given the factors of tariffs, market volatility, and fleet realignment.