LOWER MACUNGIE TWP., Pa. - Mack Trucks’ fourth quarter and full year 2019 results should be no surprise to anyone who follows the business news. First, there was a 12-day strike in October. More recently, layoffs and down weeks for production were announced.
As a consequence, Mack, a division of Volvo Group, reported declining results for the fourth quarter and all of 2019 after enjoying a very successful 2018. One positive for Mack in 2019 was that market share increased from 6.7% to 7%.
Martin Lunstedt, Volvo Group president and CEO, explained his company’s position in the cyclical truck manufacturing marketplace:
“During the last couple of years, there has been both a renewal and an expansion of the truck fleets in Europe and North America. Transport capacity has caught up with demand and markets are currently driven by the replacement need. We have adjusted our production and are in good balance with demand in Europe. In North America, we will reduce production further in the first quarter to meet the lower demand and to facilitate a necessary dealer destocking.”
Fourth quarter and full year results
Mack Truck's order intake was down dramatically in 2019, and deliveries were mixed.
In the fourth quarter of 2019, new orders totaled 4,866, a decline of 40% from orders of 8,109 in the prior year fourth quarter. For the full year 2019, orders were 15,413 compared to 31,272 in 2018, a decrease of 50%.
With declining orders, deliveries fell as the year progressed. For the fourth quarter of 2019, deliveries were 5,092, a decrease of 18% from deliveries of 6,184 in the fourth quarter of 2018. However, for all of 2019, deliveries were 27,506, a 17% increase over 2018, as the company worked off the avalanche of 2018 truck orders in the first part of 2019.
Worldwide, in Q4 2019 deliveries of trucks declined by 9% and net order intake by 10% compared with the same quarter in 2018. For the full year total deliveries increased by 3% while orders declined by 29%.
Volvo Group overall increased net sales by 11% for the year, although sales were flat in the fourth quarter compared to the fourth quarter of 2018. The operating margin for the year was 11%, whereas the operating margin for the fourth quarter was 8.8%.
As of the end of 2019 Volvo Group had 103,985 employees, a decrease of 1,190 employees from the end of 2018. The number of blue-collar employees decreased by 2,129, due to the reduction in production levels. White collar employment increased by 939, primarily due to increases in Research and Development.
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.
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Mack Trucks results cycle down | Business News - WFMZ Allentown
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