The company, which joined forces with Nvidia Corp last month to develop artificial intelligence for self-driving trucks, is racing with rivals to develop autonomous and electric trucks.
However, order intake for trucks, which the company sell under the Volvo, Mack, Renault and UD Trucks brands, fell for a second consecutive quarter - by 21% to 47,821 units. The company also undertook a 10 billion Swedish crown cost-cutting program that completed in 2016, which included shedding thousands of mainly white collar jobs and focusing its spending on businesses where it could be a market leader.
Volvo has seen strong demand in recent years as truck buyers renewed fleets starved of investment during the last downturn, but this has led to it facing supply chain bottlenecks that have added costs and weighed on profit.