Heavy-vehicle maker Volvo posts first-quarter loss for 2009

VolvoStockholm- Swedish heavy-vehicle maker Volvo on Friday reported a pre-tax loss of 5.8 billion kronor (692 million dollars) for the first quarter of 2009, as demand "sharply" weakened.

In the corresponding business period of 2008, the Volvo Group, which does not include the Ford-owned car division, posted pre-tax income of 6.1 billion kronor.

Net sales plunged 27 per cent to 56 billion kronor, resulting in a net loss of 4.3 billion kronor for the quarter.

"The economic climate was very difficult in the group's markets in Europe, North America and Asia," Volvo chief executive Leif Johansson said in a comment.

Johansson said Volvo planned to "further reduce production rates in most plants during the second quarter" to avoid building up inventory.

First-quarter order bookings for trucks plunged 65 per cent year-on-year to 20,183 units, Volvo said, with the European market falling 71 per cent.

For full-year 2009 the European market for heavy trucks was expected to be half that of 2008.

Truck deliveries declined 51 per cent year-on-year to 32,237 units with lower demand in all major markets.

The bus division sold 4,006 units, up 10 per cent on first quarter 2008, Volvo said, adding that order bookings fell by 8 per cent.

The Volvo Group sells trucks and heavy vehicles, buses and construction machinery, and includes the divisions Volvo Aero and Volvo Penta.

The construction-machinery division was hit by lower activity in the housing and construction sector.

Earlier this week, the group announced plans to shed a further 1,500 employees in Sweden. During 2008 and 2009 the group was to reduce its workforce and consultants by over 20,000 people.

At the end of the quarter, the Volvo Group had some 98,000 employees worldwide, compared with 101,381 at year-end 2008.(dpa)

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