STOCKHOLM, July 18 (Reuters) - Swedish truck maker AB

Volvo reported on Thursday a bigger rise than

expected in second-quarter operating profit and said demand

continued to normalise compared with the high levels of 2023.

Operating profit was 20.3 billion crowns ($1.92 billion)

against a year-earlier 14.6 billion and a mean forecast in an

LSEG poll of analysts of 18.0 billion.

Volvo said in a statement profit margins were squeezed

by lower sales volumes and increased investments in research and

development, but were boosted by carry-over from price increases

implemented last year.

"The Volvo Group delivered good profitability as demand

in many markets continued to normalize compared with the high

levels of 2023," CEO Martin Lundstedt said.

The Gothenburg-based group, which also makes

construction equipment and engines, raised its forecast for the

total European heavy truck market this year to 290,000 new

units. Its previous forecast for the region, from April, was for

280,000.

The forecast for the total North American heavy truck

market remained unchanged at 290,000 units.

It lowered its outlook for the Chinese medium and heavy

duty market to 750,000 units from 800,000.

($1 = 10.5512 Swedish crowns)

(Reporting by Johan Ahlander, editing by Anna Ringstorm)