Volvo reported today, February 20th, its biggest truck sales drop in the past three years, due to the sluggish demand in North America and Europe.
Volvo is the second biggest producer of heavy trucks in the world and sells trucks under its own name, Eicher, UD Trucks, Mack and Renault brands. The automaker reported January sales down 23%, the steepest drop since December 2009 when sales fell 29%. The automaker’s plants have been running at half speed due to the weak demand, pushing the automaker into a heavier than predicted earning-drop during the fourth quarter.
Volvo plans to surpass Daimler and become the world’s biggest heavy truck manufacturer, relying on its JV in China, which still needs approval from the country’s government. The automaker expects a rough first quarter, after its shipments in January dropped 30% in Europe, its biggest market, and 38% in North America.
If last year demand for heavy trucks in Asia was strong due to the reconstruction after the natural disasters in Japan in Thailand, this year heavy-duty truck makers will have to make increased efforts to fight the sluggish demand in North America and the economic downturn in Europe. Last month truck shipments in Asia dropped 23%.