Volvo: Investor Day in New York

At Tuesday's Investor Day in New York, Volvo's President and CEO Leif Johansson announced that the global recession had forced the Group to adapt all of its operations to today's significantly weaker demand.

"The Group's order intake has dropped substantially in several markets. Demand in Europe has slowed abruptly and the US market has continued to decline from its already low level. Emerging markets in Eastern Europe and parts of Asia have also deteriorated rapidly, as has South America recently," says Johansson.

Johansson also announced that the decline in order intake for the company's truck operations in Europe has continued in the fourth quarter due to the ongoing financial uncertainty and considerably weakened economy. Within Volvo's truck operations, production will shut down on certain days and weeks during the fourth quarter, primarily in December, to enable the company to adapt its manufacturing rate to the prevailing demand.

The North American truck market also remains weak. As a result of the low level of deliveries of new trucks in the industry, the average age of the US truck fleet is now higher than it has been in a long time. This means that many carriers will soon reach a point when it becomes cheaper to invest in new trucks than increase costs for spare parts and repairs.

Volvo Construction Equipment is also currently implementing measures to adapt the capacity of its global production system to the significantly weaker demand. All of the company's plants will be affected as Volvo CE implements personnel cutbacks and shuts down production on certain days and weeks during the fourth quarter, particularly in December when production will essentially come to a halt.

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