Volvo says Europe demand will slow

City A.M. Reporter
TRUCKMAKER Volvo said it was preparing to cut output in anticipation of lower vehicle demand in Europe next year as a recovery in sales in the region runs out of steam.

The group reported a third quarter operating profit of 5.8bn crowns (£553m), up from last year’s 4.9bn on recovering demand but undershooting a forecast for 6.2bn crowns.

It also warned of slowing growth in the emerging regions that have boosted truck makers’ sales since the previous slowdown, saying the Chinese construction equipment market would slow and forecasting a weaker Brazilian truck market next year.

The company saw overall European truck sales rising this year to 240,000 units from last year’s 179,000 units, before the expected 10 per cent drop next year.

Overall sales of trucks rose 16 per cent year on year to 47.7bn crowns in the quarter while sales of construction equipment rose 18 per cent year on year to 14.96bn crowns.

For North America, it expected the market to sell 210,000 trucks this year, below a previous forecast, but rising a further 20 per cent in 2012.