STOCKHOLM - World number two truck maker Volvo said on Wednesday deliveries of its trucks fell 8 percent year-on-year in January as weak demand continued to plague its main European market.
The highly cyclical heavy-duty truck market plunged into its steepest downturn in decades when the global financial crisis struck in 2008, ending years of easy credit and booming sales that propelled European makers to record profits.
A growing body of evidence in recent months has indicated the market has hit bottom as economies across the world limp out of recession on the back of unprecedented government and central bank stimulus. But there are few signs of a solid recovery.
Volvo, which sells trucks under the Renault, Mack, UD Trucks and Eicher brands as well as its own name, said shipments were down 32 percent in Europe, its biggest market, while they rose 21 percent from extremely low levels in North America.
In Asia, shipments of the Swedish group's trucks rose 12 percent from a year earlier.
Overall, I would say January is a little bit worse than expected -- volumes should have been a bit better, Handelsbanken Capital Markets analyst Hampus Engellau.
It is mainly because of Europe, and to some extent North America. Latin America is still very good. Brand wise it's Volvo and Renault that are behind the weaker deliveries. Both UD and Eicher show volume increases.
Shares in Volvo edged up 0.3 percent to 60.7 crowns after the news, in line with the 0.2 percent gain in the Stockholm bourse's blue-chip.
Volvo, which lost 17 billion crowns ($2.4 billion) last year, has said it will raise output in coming months to reflect stronger order intake, but the increase will be cautious due to nagging uncertainty about the strength of the upturn.
Rival Scania has said it expects a slow spring for truck sales in Europe, which is also its biggest market, amid excess transport capacity and lingering difficulties for customers to obtain credit.
Volvo has forecast the European truck market will grow about 10 percent this year from dismal levels recorded in 2009 while the North American market, hit much earlier by the U.S. financial woes, is seen up about 20-30 percent.
(Additional reporting by Victoria Klesty; Editing by David Cowell)