TRUCKS DEMAND GOES DOWN, VOLVO REGISTER 45% DROP FROM THE SAME QUARTER LAST YEAR
By D yadav
Date: Oct 19 , 2019
STOCKHOLM: AB Volvo, a Swedish truck manufacturer reported a sharp drop in third-quarter indicating the slowdown in commercial vehicle markets it is also a matter of concern over international trade and the global economy.
One of the world's largest truck manufacturer said orders for its trucks, including brands such as Mack and Renault, fell 45% from the same quarter last year. Several analysts had forecast a drop of slightly more than 30%.
“AB Volvo is well prepared for what he described as an expected correction in its main markets” said Chief Executive Martin Lundstedt at a news conference.
He added Company had reduced production volumes over the past quarter and would make further adjustments over coming quarters in light of declining orders.
Shares in AB Volvo fell 1.8% by 0904 GMT, having dropped 7% over the six months before Friday's results as investors increasingly priced in a market downturn. Rival Traton , Volkswagen's recently listed truck manufacturer, was down 1.9% in Frankfurt.
"Truck order intake was on the weak side, 17% below our estimate and 20% below consensus," brokerage Pareto said in a note, forecasting downgrades to consensus estimates.
Volvo, which also makes construction equipment, buses and engines, said it expects the market for heavy trucks to shrink by about 14% in Europe and 29% in North America next year as customers hold back on investment in the face of economic uncertainty.
Ahead of the results, analysts at Citi predicted that Volvo would forecast a truck market decline of a little more than 11% for Europe and about 25% for North America, the two markets that still generate most of the group's profit.