By Marie Mannes
STOCKHOLM (Reuters) - Sweden's AB Volvo lifted its outlook for key heavy-duty truck markets in Europe and North America this year on Thursday as it reported a 32% year-on-year rise in order intake for the first quarter.
The maker of vehicles under brands such as Mack Trucks and Renault (EPA:RENA) as well as its own name had already pre-announced record operating earnings for the first quarter last week that were well above market expectations.
Volvo, a rival of manufacturers such as Daimler (OTC:MBGAF) Trucks and Traton, forecast 2023 heavy truck sales in Europe and North America of 320,000 for each region. Its previous forecast had been for 300,000 in both regions.
"Disturbances in the European supply chains have not been as extensive as in the autumn and have contributed to increased productivity," Chief Executive Martin Lundstedt said in a statement, adding however that the supply chain remained unstable in North America, hampering production there.
Handelsbanken analyst Hampus Engellau said the raised truck outlook sent a strong message that Volvo sees the second-half of 2023 as a good market for its trucks.
"If one has to search for problems during the quarter, there are still supply chains in North America, but still the operating leverage was quite decent, so I would say we see improvement ahead," Engellau said.
Following several quarters with punishingly high costs and supply-chain pain, bottlenecks have begun to ease, allowing truck makers to reopen order books that had been kept under a tight lid to avoid lead times becoming excessive.
Gothenburg-based Volvo, which also makes construction equipment and engines, said there was pent-up demand to replace aging fleets which had helped boost order intake.
Shares in Volvo, one of Sweden's biggest employers, rose 1.2% in morning trade in a flat broader market.
Volvo is not the only automaker to have had a good quarter. German Traton reported profit above expectations.