UPDATE 1-Volvo cuts production as truck shipments slip

Wed Dec 19, 2012 4:10am EST

* Shipments to North America down 27 percent in November

* European shipments down 13 percent

* Says cuts Volvo-branded output in North America

* Shares down 0.8 percent (Adds background, detail)

STOCKHOLM, Dec 19 (Reuters) - Swedish group Volvo , the world's second-biggest truckmaker, is scaling back production in North America after tough economic conditions saw its truck shipments fall 15 percent in November.

Volvo, which sells trucks under the Eicher, Mack, Renault and UD Trucks brands as well as its own name, said on Wednesday deliveries in its biggest market, Europe, fell 13 percent in November year-on-year and were down 27 percent in North America.

Heavy-duty truck makers have run into weaker demand in recent quarters as the euro zone crisis has stymied demand in Europe, while a U.S. upturn has faltered amid worries about a looming fiscal tightening.

Volvo said it was cutting production of Volvo-branded trucks in North America. "Concerns about the economy continued to affect the market, and a combination of stop days and rate reduction is being implemented to align production with demand."

North American deliveries for its Mack brand were also down sharply in the month, hit by fewer production days and concerns about the so-called "fiscal cliff" of automatic tax hikes and spending cuts in the United States.

A slowdown in economic activity in Europe and uncertainties over the business climate were also hurting demand for its Volvo brand, it said.

Shipments fell 15 percent in Asia and decreased 12 percent in South America.

Handelsbanken analyst Hampus Engellau said the delivery numbers were in line with expectations adding that the production cuts were also expected.

Volvo shares were down 0.8 percent at 90.60 crowns at 0854 GMT, slightly underperforming the wider Stockholm market . (Reporting by Mia Shanley and Johannes Hellstrom; Editing by Dan Lalor)

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