Sweden's Volvo and German competitors Daimler and Volkswagen are enjoying brisk business as fleet buyers step up purchases during what many analysts expect to be the peak year of the current demand cycle.

The flipside of strong demand was higher transport costs and increased spending on staff working overtime to complete orders.

The first major European major truck maker to report on the quarter, Volvo raised its guidance for the North American and Indian heavy-duty truck market as well as for construction equipment in nearly all markets.

Operating profit at the group, which makes trucks, construction equipment, buses and engines, rose to 8.30bn crowns ($976m) from 6.83bn and topped the 8.17bn expected by analysts in a Reuters poll.

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