There are some signs that a weaker economic outlook – especially in Europe – is beginning to impact heavy truck makers, despite the strong pickup to volumes as the truck investment cycle turned positive this year.
Starting in November, Scania says it will adjust the production rate down by 10-15% at its units in Europe. The background is a ‘deceleration in demand in various markets’, Scania says. The adjustment will be handled within the framework of existing flexibility agreements between the company and trade union organisations.
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In a statement Scania warned that ‘government financial problems in Europe and the US have now begun to affect economic activity and have led to hesitation among customers’.
“It is a matter of deceleration in Europe, but also a slower pace of order bookings from the Middle East,” says Martin Lundstedt, Executive Vice President in charge of Scania’s sales and marketing.
During the first nine months of 2011 Scania has maintained a high, stable production rate, but starting in November the company will lower its production rate due to falling demand. Compared to the end of the third quarter, at the global level this means that the vehicle production rate will be reduced by 10-15%, the company said.
“We will lower the production level and adapt our costs by using the existing flexibility. The adjustment in production level will be handled within the framework of existing flexibility agreements between the company and trade union organisations at the various production units,” says Anders Nielsen, Scania’s Head of Production and Logistics.
“In Latin America, demand has stabilised at a high level, which means that we have continued high capacity utilisation at our production units in Brazil and Argentina,” Mr Nielsen says.
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By GlobalDataSome analysts argue that Scania is more vulnerable than some others to weaker sales in Europe. Daimler’s trucks unit has said that its factories will be producing at capacity into next year, reflecting still strong order books.
