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November 4, 2019 11:30 AM, EST

VW’s Traton Joins Rivals in Warning Demand for Trucks Is Souring

Traton Traton flags. (Traton Group)

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Volkswagen AG’s Traton truck-making division echoed competitors in warning it’s “intensively” preparing for a much more difficult environment next year.

While the manufacturer confirmed guidance for this year and reported nine-month unit sales rose 8% to 179,100 vehicles, it said orders have dropped 6%, according to a statement Nov 4. The gloomier outlook for trucks was flagged last week when VW reported earnings.

“The political and macroeconomic situation is becoming more challenging for all of us,” Traton Chief Executive Officer Andreas Renschler said on a conference call with reporters. “Flexibility will be the name of the game.”

Traton will look again at its forecasts for 2020 in the new year, he said, without elaborating.

An economic downturn is hitting trucks makers faster than expected in Europe and North America. Last month rival Daimler AG lowered its margin guidance for its unit making heavy vehicles. Volvo Group also said it’s readying for more output cuts after forecasting a slump in truck deliveries next year in both regions.

Market Debut

VW, the world’s largest automaker, pushed through Traton’s stock market debut this year to fuel an ambitious global expansion outside its main European market. The truck maker makes Sweden’s Scania and Germany’s MAN brands, and has a subsidiary in Brazil.

Investors have remained cautious so far about Traton’s prospects, with some analysts favoring Swedish peer Volvo following a successful restructuring in recent years.

Traton gained as much as 3.8%, the steepest intraday increase since Sept. 10, to 23.95 euros as of 12:16 p.m. Nov. 4 in Frankfurt, as shares across Europe rose on optimism about the U.S. reaching trade deals. The company sold shares for 27 euros each in its June initial public offering.

With assistance from Andrew Davis.

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