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RECESSION

Volvo sees truck deliveries tumble in November

Swedish truck maker Volvo said on Tuesday that its worldwide truck deliveries had plunged 21 percent in November and warned it would be forced to halt its European production for up to 25 days in the first quarter of 2009.

Volvo sees truck deliveries tumble in November

“Total deliveries from the Volvo Group’s truck operations in November amounted to 19,326 vehicles, which is a decrease of 21 percent compared with the corresponding period of last year,” the company said in a statement.

Volvo said that during the fourth quarter it was being forced to “continuously stop production for days and weeks to avoid an inventory build-up of trucks,” and that during the first quarter next year would stop European production “for approximately 20 to 25 days.”

The world’s second-largest truck maker painted a bleak picture of the global market, pointing out that in its main market of Europe, “the number of cancelled orders was bigger than the number of new orders” in October and November.

The group’s truck deliveries on the continent were down 42 percent, with deliveries in Eastern Europe plunging a full 65 percent.

North America deliveries were meanwhile down 22 percent, while in South America and most of Asia they fell nine percent. The only bright spot on the map was the Middle East, where Volvo reported a 104-percent hike in deliveries year-on-year.

“Customers continue to be very cautious and are in most cases waiting with their investment decisions due to the current uncertain macro-economic environment,” Volvo explained.

When the company reported its third quarter results at the end of October, Volvo cut its 2008 European market growth forecast for heavy trucks to between zero and five percent year-on-year, down from a previous forecast that the market would grow 10 percent this year.

Volvo spokesman Mårten Wikfors meanwhile told Sveriges Radio on Tuesday that the company would seek a loan from the European Investment Bank to keep short-term development projects from facing a cash crunch running.

He did not specify the amount, but said it would probably be worth several billion kronor.

“This is about helping the company through a situation that we have never seen before … This downturn is so steep that it doesn’t resemble anything we’ve seen throughout the company’s history,” he explained.

Following Tuesday’s announcement, the company saw its share price jump 3.39 percent in midday trading on the Stockholm stock exchange, which was up an overall 1.78 percent.

ECONOMY

Worst of crisis now behind us, says Germany’s chief banker

Germany has turned the corner on the worst of an economic crisis sparked by the coronavirus pandemic and is now on the path to recovery, the central bank chief of Europe's biggest economy said Sunday.

Worst of crisis now behind us, says Germany's chief banker
Jens Weidmann. Photo: DPA

“We experienced in the last months the deepest economic slump in Germany's (post-war) history,” Jens Weidmann told Sunday's edition of the daily Frankfurter Allgemeine Zeitung.

“The good news is: the trough should be behind us by now, and things are looking up again. But the deep slump is being followed only by a comparatively gradual recovery.”

Weidmann, who has never minced his words against expansionary policies ramped through in the past by the European Central Bank, on Sunday also voiced support for the unprecedented economic rescue and stimulus packages unleashed by Berlin to shield German companies and jobs.

Chancellor Angela Merkel's government had stunned observers in March when it unveiled a rescue package worth 1.1 trillion euros, smashing through a long-held no new debt dogma to fund the measures.

Earlier this month, it said it would plough another 130 billion euros into various schemes, including a cut in VAT, to stimulate the economy.

 

Reacting to comments that Germany, once known as a “frugal” nation, was now dramatically loosening its purse strings, Weidmann said: “The image of the Swabish housewife is often wrongly portrayed.

“She is not saving for the sake of saving, but so that there is money that can be spent sensibly and in case there are difficult times. And that is precisely the case here.”

Like nations across Europe, Germany shut schools, shops and sent workers home from mid-March to halt transmission of the coronavirus.

The impact of the health crisis has pushed the economy into a deep recession believed to be the worst since World War II.

After the rate of new infections dropped sharply, Europe's biggest economy began easing restrictions in early May although social distancing rules are still in place and huge events banned.

Nevertheless, the improved health situation and the huge government support have helped lift sentiment, with a closely-watched survey showing confidence among investors surging to its highest level since before the financial crisis.

 
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