Global credit crisis proves devastating for truck OEMs
October 30, 2008
October 30, 2008
With global financial institutions in meltdown, it’s getting awfully difficult to sell trucks. Reviewing the most recent quarterly report issued by Volvo AB revealed a startling figure.
In the third quarter of 2008, Volvo’s net order intake for all of Europe was 115 trucks. One hundred and fifteen! That is pretty much a 100% decline from the 41,970 trucks Volvo sold in Europe during the third quarter of 2007. Hopes that strong European demand for trucks would offset the sluggish North American market seem to have evaporated due to the global credit crisis. Simply put, customers can’t get the credit they need to buy new trucks.
In its report, Volvo explained that there were some 20,000 truck orders in the system. However, when the credit crisis reared its head, Volvo prudently met with customers to review their orders. During this process, nearly all orders were wiped from the books.
“The review resulted in that approximately the same number of orders that were received during the quarter was taken out of the order book,” Volvo AB said in its financial report.
Incidentally, North American orders totalled 7,578 for the third quarter of 08, about 1% higher than 07 levels over the same period.
The good news is that both in Europe and here in North America, trucks are still required to move the vast majority of freight. And today’s sophisticated fleet manager has a comprehensive understanding of lifecycle costs and the need to replace equipment on a timely basis. Let’s hope some normalcy returns to the global credit markets soon, so fleets can obtain the capital they need to fund those equipment purchases.
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at email@example.com or follow him on Twitter at @JamesMenzies. All posts by James Menzies