Despite an overall increase in the truckmaker's performance, employee numbers still dropped in 2021—in part due to the challenges brought on by the global automotive semiconductor shortage. The Volvo Group also divested UD Trucks in April of that year, generating a 2.3 billion U.S. dollar payout from the sale.
The Volvo Group is a multinational Swedish company that produces, distributes, and sells trucks, buses, construction equipment, and financial services. Its headquarters are located in Gothenburg.
A slow recovery across segments
In 2021, trucks comprised Volvo Group’s largest share of net sales at 25.5 billion U.S. dollars, followed by construction equipment at close to 10.2 billion, and buses at 1.5 billion U.S. dollars. Europe was the leading region in terms of truck deliveries and, additionally, showed a recovery in 2021, as did most other regions, except for Asia, Africa, and Oceania. In these latter regions, the Volvo Group had yet to recover from the slump generated by the COVID-19 pandemic.
The global chip shortage further impacted the company, stunting its recovery through 2021. Truck production slowed or halted across the group’s various brands. With an uptake in truck orders in 2021 while production lagged, Volvo could continue to see repercussions of these supply chain challenges throughout 2022.
The construction equipment delivery rise—by eight percent between 2019 and 2020—was still observable throughout 2021. The bus segment, however, did not fare as well, and was the only segment of the group which recorded a drop in sales. Asia was the leading market for construction equipment, dwarfing all other markets, in part, due to the popularity of the Volvo Group’s subsidiary SDLG, headquartered in China.
Market competition heading toward zero-emission vehicles
In 2020, the Volvo Group ranked seventh among the leading manufacturers for construction equipment worldwide, a market dominated by Caterpillar with a market share of 13 percent. Of the European manufactuers, Volvo Group was the first, followed by Liebherr of Switzerland. Overall, European construction manufacturers lost market shares year-over-year, with Volvo dropping from sixth to seventh in the ranking. That same year, Daimler was the leading truck manufacturer worldwide, with 42.5 billion U.S. dollars in revenue, trailed by the Volvo Group with a revenue of 27.7 billion U.S. dollars.
In order to maintain a competitive edge in the global market, Volvo Group has been steadily investing in research and development (R&D), reaching over 18 million Swedish kronor (just under two million U.S. dollars) in 2021. The primary focus of the company’s R&D has been directed toward zero-emission commercial vehicles. In March 2022, the manufacturer pledged to CALSTART’s Drive to Zero campaign, aiming for full market penetration of zero-emission trucks and buses by 2040. Progress was already underway in 2020 when Volvo represented a quarter of European truck registrations covered under the European Union’s CO2 standards.