North American orders dropped to force Volvo to consider cuts
The world’s second largest truck maker Volvo (Volvo), the confidence weak and other factors, its second-quarter orders dropped, this may cut production.
Volvo CEO Olof Persson Olof Persson said: “The current lower demand means that our production speed is a little too fast.”
The global truck orders received by the company’s second quarter to 53,000, a decrease of 19% over the same period last year, North American truck orders plunged 47 percent, to 15,314.
The Swedish company U.S. orders were down due to macroeconomic prospects, causing customers to become more cautious.
Analysts said the data show that the momentum of the economic downturn affected the European part of the heavy-duty vehicle market, has now spread to North America.
Volvo’s earnings report showed that the various regions of Europe, there are significant differences. Volvo pointed out that the deterioration of the southern European market spread to France, affecting the brand to Renault Trucks (Renault Truck) was broadly stable, while demand in Central and Northern Europe. The end result is that European truck orders in the second quarter decreased by 13% to 21538.
Despite the uncertain economic situation, but Volvo Europe and the U.S. truck market, the overall size of the forecast remained unchanged, the estimated full-year sales were 230,000 and 250,000.
Looking to the future, Volvo ability to maintain or expand its European market share, depending on the new engine can meet the new emission standards in Europe in 2014 to implement its announced this month.
Volvo said yesterday that this environment-friendly engine to a 77% reduction in nitrogen oxide emissions from 2013 began to be used Volvo trucks.
Volvo second quarter the poor performance of the truck business, operating income fell 19 percent to 4.1 billion kroner ($ 587 million), the second largest business construction equipment business has shown resilience.
Volvo said that the business operating income increased 35 percent to 2.6 billion kronor, thanks to a strong product lineup and excellent cost control.
Although the construction equipment business in the second quarter of profitability has increased, but Volvo cautious about the prospects of this business. Volvo said it would reduce the plant production rate in Europe and China, because the construction of weak growth, fierce price competition.
The Volvo Group of the second quarter operating income of 7.34 billion kronor, down 4% over the same period last year.
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