Volvo trucks took a major stock market hit on Friday on news that third quarter profits were down 35.5 percent on last year.
The Swedish truck maker cut market growth forecasts for this year, saying that orders had fallen 55 percent for two quarters running.
The company said demand for heavy trucks, a leading indicator of the general economic climate, had slowed far faster than expected because of the deepening impact of the global crisis.
Net profit for the quarter fell on a 12-month comparison by 36.5 percent to 2 billion kronor ($255 million) and operating profit fell 36.6 percent to 3.17 billion kronor even though sales edged up 2 percent to 69.6 billion kronor.
Chief executive Leif Johansson said that after record sales and profits in the first two quarters, sales growth had slowed down far faster than expected.
The economic slowdown had been particularly exacerbated by the global financial crisis.
Demand was weak on the company’s main market in Europe, and also in Japan, and signs were emerging that the economic climate was weakening in other parts of the world.
Orders taken in the third quarter had fallen by 55.0 percent as in the second quarter.
Volvo said it now expected growth of the European market for heavy trucks this year to be zero to 5 percent from the level last year. In the second quarter it had forecast the market would grow by 10 percent this year.