Volvo Group faced a challenging 2024 as slowing truck sales in Europe led to a decline in revenue and profits. The company cited weakening demand, inflation, and geopolitical instability as key factors impacting its financial performance. Despite these hurdles, Volvo continues to focus on innovation, sustainability, and strategic realignment.
Financial Performance: Declining Sales and Operating Income
In its full-year 2024 financial report, Volvo Group reported net sales of SEK 526.8 billion (€45.98 billion), marking a decline from SEK 552.3 billion (€48.20 billion) in 2023. The primary reason for this drop was a slowing European truck market.
The company’s adjusted operating income also saw a decrease, falling to SEK 65.7 billion (€5.73 billion) compared to SEK 78.2 billion (€6.82 billion) in 2023.
For Q4 2024, net sales declined 6% to SEK 138.4 billion (€12.08 billion), down from SEK 148 billion (€12.91 billion) in Q4 2023. Adjusted operating income for the quarter was SEK 14.0 billion (€1.22 billion), a drop from SEK 18.5 billion (€1.61 billion) in the same period last year.
Volvo attributed this downturn to a slowdown in construction and freight activity across key markets following several years of growth. Persistent inflation and global uncertainty further dampened the company’s financial performance.
Strategic Investments and Business Adjustments
Despite market challenges, Volvo Group remains committed to research and development (R&D), with 2024 marking a year of major product launches and high R&D spending, particularly in Q4.
CEO Martin Lundstedt emphasized that while R&D investments will remain a priority, 2025 spending will level out slightly above 2024 levels.
The company is also streamlining its portfolio to strengthen its core business while forming new strategic partnerships aimed at accelerating its transition toward carbon-neutral and energy-efficient solutions.
To maintain shareholder value, Volvo announced an ordinary dividend of SEK 8.00 (€0.70) per share and an extra dividend of SEK 10.50 (€0.92) per share.
Volvo Cars Takes Full Ownership of NOVO Energy AB
In a separate move, Volvo Cars announced that it has acquired Northvolt AB’s stake in their joint venture, NOVO Energy AB, gaining full control of the electric vehicle (EV) battery factory project in Gothenburg, Sweden.
Volvo had previously disclosed in October that it needed a new partner to ensure the project moved forward as planned. The financial terms of the transaction remain undisclosed, and the deal is pending regulatory approval.
Northvolt AB, facing financial struggles, has been offloading non-core businesses and joint ventures to stabilize its finances. However, the company has signed a framework agreement with Volvo Cars to explore future collaboration opportunities in North America.
Looking Ahead: Innovation and Sustainability in Focus
Despite economic pressures and falling truck demand, Volvo Group remains focused on technological advancement and sustainability. By prioritizing R&D and strategic restructuring, the company aims to adapt to market conditions while advancing green and efficient mobility solutions.