Volvo truck shipments, orders hit by downturn

World number two truckmaker Volvo said on Tuesday deliveries had tumbled 21 percent year-on-year in November and that its order book was shrinking rapidly amid a sharp market contraction.

Volvo shares dipped 1.0 percent, underperforming a 0.4 percent gain in the broader market .OMXSPI.

Volvo, whose brands include Renault, Nissan Diesel and Mack as well as its own name, said deliveries fell 42 percent in its biggest market, Europe, and 22 percent in North America.

In total, Volvo delivered 19,326 trucks in the month.

Europe's heavy-duty truck industry has seen demand plunge from high levels in recent months as a withering financial crisis has pushed a growing number of export markets into recession and made funding for potential purchasers difficult.

Volvo has already suffered the effects of this decline, reporting in late October a 100 percent fall in order bookings after clearing its books of uncertain orders and cancellations.

The company has since announced it will shed thousands of jobs and cut production at its plants.

Volvo said a weak order trend from the third quarter had continued, with the number of cancelled orders in October and November eclipsing new orders by some 1,800 trucks in Europe.

"In total, the effect is that the order book continues to shrink at a rapid pace," the company said in a statement.

Volvo said the woeful market conditions meant it would continue halting production at its European factories early next year with an estimated 20 to 25 stop days in the first quarter.

"When we saw zero order intake in the third quarter, it looked like this couldn't get any worse -- but it has," said an analyst who asked not to be identified.

"A negative order intake in Europe, that probably had not been anticipated by the market."

In Asia, home to a bigger share of the group's business following the acquisition last year of Nissan Diesel, deliveries were up 24 percent from a year earlier, Volvo said.

Separately, the company said it was considering applying for loans from the European Investment Bank (EIB) under a guarantee scheme for loans to the vehicles industry launched by the Swedish government earlier this month.

Volvo was eyeing loans, to be used to finance short-term development projects, of "probably a couple of billion" Swedish crowns, Volvo spokesman Marten Wikforss said.

"As a company one has to look for ways to guarantee certain things. One doesn't take up an EIB loan to finance the normal running of operations," said Wikforss.

The loans would be used to guarantee the company was not forced to postpone or drop development projects due to the sharp market downturn, he said.

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