Volvo, the world's second-largest truckmaker, is cutting production in Europe as the sovereign-debt crisis sinks demand.
Volvo will gradually eliminate the evening shift at its factory in Gothenburg, Sweden, to lower production to 75 trucks a day by the end of the year from 100, Christer Johansson, the Swedish truckmaker's head of investor relations, said today by phone. The duration of the slowdown depends on demand, he said.
"We're producing at a higher level than demand calls for and therefore we need to adjust production," said Mr Johansson.
The decline in demand for Volvo trucks accelerated in October, with sales tumbling 8 percent to 20,254 vehicles, the company said in a statement today.
Ten-month deliveries fell 3 per cent to 185,644 vehicles.
Volvo, the maker of Mack trucks in North America and Renault brand vehicles in Europe, said uncertainty about the region's business climate is having a negative impact on truck orders.
The truckmaker last month reported third-quarter profit that missed analysts' estimates as sales dropped.
Industrywide registrations of heavy-duty trucks declined 7.7 per cent in the first nine months of 2012, according the ACEA trade group.
Volvo will also cut production of Renault-brand trucks by more than the 20 per cent that was already planned, Mr Johansson said.
The company will gradually reduce assembly of the vehicles to three days a week until the end of 2012, he said.
The shares gained as much as 1.2 per cent to 89.65 kronor and was little changed as of 11.45am in Stockholm.
Bloomberg