Volvo had more orders cancelled in October and November than it had truck sales.
The company said yesterday that total deliveries were down 21% in November and that it was having to continuously cut production days and weeks to avoid a build-up of inventory. It said that in Europe it had a negative net order take of 1,800 trucks in October and November and that orders are weakening across the world. Demand in eastern Europe, formerly a strong market, was down 65%.
“In total, the effect is that the order book continues to shrink at a rapid pace,” Volvo said. Production cuts will continue into next year. During the first quarter of 2009 production will be stopped for approximately 20-25 days, said the company.
According to The Financial Times, Volvo has said it is considering applying for loans from the European Investment Bank. The loans were agreed as part of a US$3bn Swedish government rescue package for the motor industry there.
Sweden is not the only national government giving support to its motor industry. France is providing credit guarantees worth US$1bn to Renault and PSA. Germany, the UK and Poland are considering similar measures. Through its European trade association, vehicle manufacturers have been asking the European Commission for financial aid. Truck makers joined this call last week.