July 20–Orders were up. Deliveries were up. But it wasn’t enough to translate into a market share gain for Mack Trucks in North America.
That’s the takeaway from a second-quarter report released Thursday by Mack’s parent company, the Sweden-based Volvo Group.
The truckmaker’s market share declined from 8.2 percent to 6.9 percent over the past year, which Volvo said reflects “the continued supply chain constraints following the transition to the new truck models” in the first quarter. The market share figure, however, was an improvement from the first quarter, when it was 6.5 percent.
Mack assembles its heavy-duty rigs at a Lower Macungie Township plant, which employs about 2,400 workers who earlier this year started building the company’s new highway truck called Anthem. While supply chain issues are affecting the entire industry as truck makers try to keep up with demand, Mack spokesman Christopher Heffner said the company’s production ramp-up of its new models continued into the second quarter — the first factor that influenced Mack’s market share drop.
“The second issue is that market demand is strongest in the highway segment, where we have significant opportunity and are already seeing growth with our new Anthem product,” Heffner said.
Mack has time to grow its market share in North America, a region Volvo said continues to showcase good demand for construction trucks and promising development in the highway segment. Despite production issues, Mack still took in more orders and delivered more trucks in North America during the quarter than it did a year earlier. The company’s net order intake was up 12 percent to about 4,650 in North America, while its deliveries there jumped 16 percent to 5,840.
“With the change-over to new product largely behind us and the strong customer response to our truck models — particularly the Mack Anthem, which allows us to be a bigger player in the long-haul market — we are confident we will see growth,” Heffner said.
But Mack’s second-quarter results lagged its sister company, Volvo Trucks, in the North American market.
Volvo took in about 10,920 orders in North America during the quarter, up 107 percent from roughly 5,280 in the year-earlier period. Similarly, deliveries increased 45 percent to about 8,200 trucks in the quarter.
To add more fuel to the sibling-rivalry fire: Volvo Trucks unveiled its refined VNX model earlier this year, a truck meant for applications such as logging and heavy-equipment transport that will compete with Mack’s Granite model. And last year, Volvo unveiled its redesigned long-haul VNL series truck.
So while Mack’s market share declined in the second quarter, Volvo Trucks’ market share climbed from 8.8 percent to 10.9 percent. Volvo said the jump reflected “a good customer reception of the new truck ranges launched in 2017.”
The demand in North America isn’t expected to go away. With strong demand for freight and a shortage of transport capacity, freight rates have increased and boosted orders for highway trucks, Volvo said. The company reiterated its forecast of 300,000 new truck registrations in North America this year, up significantly from about 244,000 last year.
“Together with our suppliers we are working hard to meet demand and reduce delivery times to our customers,” Volvo Group President and CEO Martin Lundstedt wrote in the report. “However, given the strong demand, we expect the supply-chain constraints to remain in the near-term.”
While the supply chain challenges remain, the overall health of Volvo Group’s truck business has, perhaps, never been better.
The business beat its profitability target for the first time, Bloomberg reported, with an operating margin that exceeded 11 percent. Meanwhile, net sales were up 16 percent.
Lundstedt also touted the company’s continued investments in new products and technologies. Specifically, he singled out Mack’s plan to have a fully electric LR refuse model operating in North America next year. The New York City Department of Sanitation, one of Mack’s largest customers, will test the vehicle.
The department also was featured in the first installment of RoadLife, Mack’s ongoing eight-part video documentary series that runs through August. The episodes can be viewed at roadlife.tv/ or on Amazon Prime Video.
Fighting for its share
Mack’s net order intake and deliveries were up in the second quarter, but its market share in North America dropped. Here’s a summary of Mack’s figures in North America, a region that represents about 90 percent of its business.
Q2 orders: 4,642, up 12 percent from 4,143 a year ago
Q2 deliveries: 5,840, up 16 percent from 5,023 a year ago
Q2 market share: 6.9 percent, down from 8.2 percent
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1:35 p.m.July 20: This article was updated with comments from Mack spokesman Christopher Heffner. This story was originally published online July 19.
2:45 p.m.July 20: This article was updated with follow-up comments from Heffner.
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