Volvo to Trim Production in December, January


Volvo will cut heavy-duty truck production in North America in December and January “as a consequence of lower demand and high inventories in the distribution channel,” it said in a press release Nov. 19.

"In North America, we will take 2 1/2 stop weeks in addition to the normal Christmas and New Year's leave," Volvo spokeswoman Kina Wileke told Reuters.

Volvo, which in North America mainly sells trucks under its own as well as the Mack brand, said the production stops would take place on the Volvo Trucks side.

During an earlier earnings-related conference call, acting CEO Jan Gurander said dealer inventory had reduced the order intake at both Volvo and Mack. Also, he said he expected the North American market to decline by about 10% in 2016, calling that a "normalization."

David Leiker, an analyst with R.W. Baird & Co., said in a note to investors that Volvo’s adjustment was not a surprise, adding that other manufacturers could "employ a similar strategy during November and December to reduce excess inventory. . . . Such actions should create a better backdrop entering 2016."

Volvo also said Nov. 19 its global truck shipments rose 2% in October year-over-year compared with a mean forecast for flat deliveries in a Reuters poll of analysts.