Volvo Deliveries Dip on Lingering U.S. Woes
Truck deliveries by world No.2 truckmaker Volvo fell 4% in January through August as gains in Europe and Asia failed to offset lingering weakness in North America, the firm said on Monday.
Volvo said it delivered 135,781 trucks in the period, down from 141,966 a year earlier. This would mean deliveries in August alone fell 7% year-on-year to 11,411 trucks, Reuters' calculations showed.
Heavy-duty truck sales in North America, Volvo's second-biggest market, have fallen sharply in recent months after a buying spree ahead of new emission rules came to a jarring halt at the turn of the year.
The firm has forecast the North American market will shrink about 40% to between 200,000 and 220,000 trucks this year, with demand recovering some time during the second half.
"(North America) is, as expected, down just over 50% year-on-year last month, so the relative performance is slightly better than what we have been seeing over the past three to four months, but there are still no signs of any real improvement there," Danske Equities analyst Henrik Breum said.
Volvo's North American truck deliveries fell 59% year-on-year in January through August, indicating a decline of 50% in August alone.
"For investors betting on a recovery in Q3 or Q4, this will represent bad news," West LB analyst Jose Asumendi said.
Volvo shares were down 1.5% to 119 crowns, underperforming a 0.2% decline in the Stockholm bourse's blue chip OMXS30 index.
In Europe, Volvo is forecasting a market of a robust 330,000 units this year, boosted by strong demand in eastern Europe. In January through August, the group's deliveries rose 4% for an estimated 7% year-on-year rise.
But in western Europe, where profit margins on truck sales are stronger than further east, shipments fell an estimated 4% in both January through August and in August alone.
"Eastern Europe, up 86% in the year to date, is excellent. And Western Europe is doing well, at least when you look at (the) Volvo Trucks (division), which is most comparable to a MAN or a Scania," Asumendi said.
"From my side it remains a challenging Q3 but they're doing the work now for a brighter 2008. It just a question of when you think it's going to turn around (in North America)."
Volvo makes trucks under the brand names Mack, Renault, Volvo and, since April 1, Nissan Diesel, which it added to its stable in a $1.1 billion deal earlier this year.
The acquisition of the Japanese truck maker has helped boost the group's footprint in Asia where deliveries were up 158% in the year through August.