Volvo Trucks Cuts N. American Sales Outlook

Swedish truckmaker AB Volvo has trimmed its sales forecast for North American for the third time as its new truck orders in the region sagged 29% in the second quarter of 2016.

The adjustment comes as the company reports its revenue in April-June fell 7% to 79 billion kronor ($9.2 billion). Operating income before special charges improved 3% to 6.1 billion kronor ($713 million). But net profit plunged 62% to 2 billion kronor ($230 million).

CEO Martin Lundstedt says Volvo Trucks now expects the North American commercial vehicle market will shrink to about 240,000 units this year. The new total is 10,000 below the company’s previous forecast and 20% below 2015’s total volume.

Lundstedt says Volvo will trim production in September by an unspecified amount to align inventories with demand in North America. He adds that it could take 12 months to achieve proper balance.

In Europe, Volvo reiterates its forecast that the overall commercial truck market in the region will grow by 20,000 units to 290,000 vehicles this year. The Brazilian market will contract to 30,000 units from 42,000 units in 2015, according to Lundstedt.

In Asia, Volvo Trucks expects the commercial truck market will shrink by 5%-15% this year. Lundstedt says Volvo detects a bottoming of the decline.