MACUNGIE, Pa. – Compared to parent company Volvo Group’s worldwide truck manufacturing operations, Mack Truck was the leader in order intake in both the fourth quarter and full year 2021. Its results for deliveries for the year also placed Mack in the top echelon, although fourth quarter deliveries showed signs of slackening.
The results helped Mack Trucks market share in North America to increase to 7.7% from 6.9% a year earlier.
The company said that demand was strong as customers in many markets were looking to both replace old trucks and expand their fleets. However, this was not fully reflected in order intake because the truck brands have been restrictive with order placement due to already large order books and long delivery times.
In a statement, president and CEO, Martin Lundstedt, explained, “Demand for trucks across key regions remains high and we are doing our utmost to produce as much as we can to reduce long delivery times to our customers.” He said that, although Trucks’ net sales increased by 8% in the fourth quarter, the adjusted operating margin dropped to 10.3% from 13.0% in the fourth quarter of 2020.
Explaining the decline in adjusted operating margin, Lundstedt noted, “We have had extra costs to manage production due to supply chain disruptions as well as higher costs for material and freight. We have actively worked with price management to mitigate the higher costs. We expect that the inflationary pressures will continue.”
A major factor contributing to higher costs, Lundstedt said, was that the global supply chain for semiconductors and other components remains unstable and, therefore, the company will continue to have disruptions and stoppages both in the production of trucks and other products of the Group. Also, the high spread of covid-19 globally is putting additional pressure on the already strained supply chain and production system.
Operating Results
In addition to Mack Truck’s increase in market share in the fourth quarter in the North American heavy- duty market, Volvo Trucks market share increased to 9.6% from 9.4% one year earlier.
For the fourth quarter Mack’s order intake decreased 1% to 7,786 from 7,839 in the fourth quarter of 2020. Order intake for the full year was 38,587 an increase of 99% from 19,396 orders in 2020.
Volvo Group’s worldwide net order intake, which includes Mack’s order intake, declined 21% in the fourth quarter of 2021 compared to 2020. Orders for the full year of 2021 increased 26% from 208,505 units to 262,873 units.
In the fourth quarter of 2021 deliveries of Mack Trucks increased 8% compared to 2020, up from 5,837 units to 6,310 units in 2021. For the full year Mack Truck’s deliveries increased 44% to 23,631 from 16,429 in 2020.
Volvo Groups third quarter 2021 deliveries increased by 7% to 60,360 units from 56,334 units in 2020. For all of 2021, deliveries were 202,458, an increase of 21% from 166,841 in 2020.
For all of Volvo Group’s business units, sales increased 6% in the fourth quarter compared to the fourth quarter of 2020. Adjusted operating income in the quarter declined 8.0% from 2020, while 2021’s operating income increased 56.7%. Volvo Group adjusted operating margin was 9.8% in the fourth quarter compared to 11.3% the previous year and 11.0% compared to 8.4% for the full year.
In the future, Volvo Group intends to be recognized as a global leader in issues that go beyond its business operations. “During the year, we accelerated our transformation journey,” Lundstedt remarked. “We set climate targets that are in line with what the latest climate science deems necessary to keep global warming at a maximum 1.50 C. Our pathway to reach the goals of the Paris Climate Agreement was validated by the Science Based Targets initiative.
“We also launched cell-centric, our fuel cell joint venture together with Daimler Truck. Furthermore, we finalized the agreement with Daimler Truck and Traton Group regarding the establishment of a high-performance charging network at strategic locations in Europe. And we partnered with Aurora to jointly develop leading autonomous transport solutions at scale with an initial focus on hub- to- hub applications for North America.”
Mack Truck is one of North America’s largest manufacturers of heavy-duty Class 8 trucks, engines and transmissions. Founded in 1900, Mack Trucks are sold and serviced in more than 45 countries worldwide. Mack is part of the Volvo Group, headquartered in Goteborg, Sweden, one of the world’s leading manufacturers of trucks, buses, construction equipment, marine and industrial engines.
