“Total deliveries from the Volvo Group’s truck operations in November amounted to 19,326 vehicles, which is a decrease of 21 percent compared with the corresponding period of last year,” the company said in a statement.
Volvo said that during the fourth quarter it was being forced to “continuously stop production for days and weeks to avoid an inventory build-up of trucks,” and that during the first quarter next year would stop European production “for approximately 20 to 25 days.”
The world’s second-largest truck maker painted a bleak picture of the global market, pointing out that in its main market of Europe, “the number of cancelled orders was bigger than the number of new orders” in October and November.
The group’s truck deliveries on the continent were down 42 percent, with deliveries in Eastern Europe plunging a full 65 percent.
North America deliveries were meanwhile down 22 percent, while in South America and most of Asia they fell nine percent. The only bright spot on the map was the Middle East, where Volvo reported a 104-percent hike in deliveries year-on-year.
“Customers continue to be very cautious and are in most cases waiting with their investment decisions due to the current uncertain macro-economic environment,” Volvo explained.
When the company reported its third quarter results at the end of October, Volvo cut its 2008 European market growth forecast for heavy trucks to between zero and five percent year-on-year, down from a previous forecast that the market would grow 10 percent this year.
Volvo spokesman Mårten Wikfors meanwhile told Sveriges Radio on Tuesday that the company would seek a loan from the European Investment Bank to keep short-term development projects from facing a cash crunch running.
He did not specify the amount, but said it would probably be worth several billion kronor.
“This is about helping the company through a situation that we have never seen before … This downturn is so steep that it doesn’t resemble anything we’ve seen throughout the company’s history,” he explained.
Following Tuesday’s announcement, the company saw its share price jump 3.39 percent in midday trading on the Stockholm stock exchange, which was up an overall 1.78 percent.