Volvo reported a 4% sales drop in truck shipments in August due to the economic crisis affecting Europe and South America.
World number two truck maker also said that sales in its home market are also beginning to drop. After the strong recovery seen in 2010 and 2011, truck makers now have to face the downfall brought by the euro zone debt crisis which causes a severe demand fall in Europe and other markets as well.
Volvo, which sells trucks under the Mack, Eicher, Renault and UD Trucks brands, besides its own name, announced that shipments in western Europe dropped 2%, but due to the robust growth in the east it managed to reach an increase of 11% in the region overall. The truck maker said that increased sales during the first months of the year helped the company with the loss in August.
“However, the current slowdown in economic activity and uncertainty about the future business climate in the region is clearly having a negative impact on demand for trucks. The weakening in market conditions in southern Europe and France continues and is also spreading across parts of Europe,” said Volvo.
In August shipments in Asia were up 9%, in North America increased 6%, while in South America fell 22%. Volvo expects to sell 230,000 heavy trucks in Europe by the end of this year, down 5% from last year.