Volvo Group expects North America weakness through 2026 amid freight slump

By Jesus Calero (Reuters) -Swedish truckmaker Volvo expects trucking demand in North America to remain under pressure into next year, it said on Friday, as weak freight activity and U.S. President Donald Trump's tariffs weigh on the market. The Gothenburg-based group, which also makes construction equipment and engines, lowered its forecast for the North American truck market while keeping its European view unchanged. It expects heavy truck deliveries of around 265,000 in North America this year, 10,000 fewer than previously envisioned, signalling softer demand expectations for the U.S. market. It expects to deliver some 290,000 vehicles in Europe. The company's shares fell around 6% in early Stockholm trading. Volvo said the North American long-haul freight market remains in recession, with lower freight volumes and prices, while customers are holding back orders amid uncertainty over new emissions rules and tariffs. Europe is expected to hold up better, as truck demand is largely replacement-driven, supported by stable fleet utilisation, it added. Despite the subdued near-term sentiment, equity analysts from Jefferies see a potential pickup later in 2026, as normalized inventory levels and back-end-loaded demand could support a gradual recovery, they said in a note on Friday. Volvo's adjusted operating profit fell around 17% to 11.7 billion Swedish crowns ($1.2 billion) in the third quarter, which matched the average forecast in an LSEG poll of analysts. Trump's move to slap a 25% tariff on imported heavy trucks has deepened trade uncertainty across North America, even though the USMCA trade agreement still shields most manufacturers from fresh duties. Volvo Group is best positioned among European truckmakers to weather the trade barriers, because it builds all trucks destined for the U.S. market domestically, along with most of its components. However, higher costs on imported parts may still affect its operations. Volvo runs 16 manufacturing and remanufacturing sites across the U.S., Canada and Mexico, and makes vehicles under brands such as Mack Trucks and Renault as well as its own name. J.P. Morgan wrote in a note to investors that weaker truck results and order softness in Europe and South America weighed on the broader picture. ($1 = 9.4074 Swedish crowns) (Reporting by Jesus Calero in Gdansk, editing by Milla Nissi-Prussak)

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