Munich, Germany: MAN, the Volkswagen-owned truck builder, has warned, like all its rivals, of falling European truck sales. Orders and profits at MAN declined in the third-quarter decline in forcing MAN to lower production.
Trucks sales are a barometer of economic activity and closely watched by economists as a guide to companies’ willingness to invest. Georg Pachta-Reyhofen, MAN chief executive, said: “The sovereign debt crisis in the euro zone led to market uncertainty and is clearly holding back economic growth. We are also seeing a downturn in a number of markets outside of Europe.”
MAN said truck order intake in Europe – particularly Germany – decreased “considerably’ in the third quarter and total truck orders fell 16% on the year in the three-month period.
“These developments translate into shrinking order books throughout the sector, including at MAN,” Pachta-Reyhofen said. MAN halted production this week at two German plants and in July it announced a hiring freeze in response to an expected 10% decline in the European commercial vehicles market this year.
Truck demand has also remained tepid in Brazil, due to new emissions regulations and the deteriorating economy, although MAN said its Latin American unit recorded a quarter-on-quarter increase in orders, “opening up more optimistic prospects for the fourth quarter,: Pachta-Reyhofen said.
Volvo earlier this month said orders had declined significantly in the third quarter and it would adjust production rates lower in several parts of the company. Daimler said truck earnings would be about €200m lower than previously expected.
Total orders at MAN fell 14% year on year to €3.5bn in the third quarter. Sales declined 4% to €3.9bn and net profit attributable to shareholders fell 66% to €57m. The company said its full-year outlook for a slight decline in revenue and a profit margin of about 6%.
