French car group PSA Peugeot-Citroen said today that it had ordered a 30% production cut after European sales collapsed and would be temporarily forced to send many workers home without pay.
The group said it had ordered 'massive production reductions' in the fourth quarter as part of 'exceptional measures' to counter a dramatic fall in new car sales amid a world economic slowdown.
Separately, company officials said that the slowdown would amount to a 30% production cut and that plants in France would lose between two and 16 days of work each in the last three months of 2008.
There would also be cut-backs at Peugeot's sites in Madrid and Vigo in Spain and at Trnava, in Slovakia, they said.
Peugeot forecast a 17% fall in car sales in Western Europe in the fourth quarter and 8% for the year as a whole. The group's own sales will fall about 3.5% after earlier predictions of a 5% rise.
Meanwhile, Renault has ordered the closure of nearly all its French factories for one or two weeks from next week, the company said.
A Renault spokesman said production would also be halted for between one and four days at Bursa in Turkey, a Moscow plant and at Novo Mesto in Slovenia.
'We are in a period when, without doubt, markets are collapsing and to avoid a brutal degradation in the company's situation, we have to manage stocks in an extremely tight way,' the spokesman said, insisting the closures are temporary.
The firm has already announced 4,900 job cuts and said yesterday that production would be cut 20% in the final three months of the year because of falling sales.
Renault said that if conditions did not worsen further it still expected a slight rise in the group's sales over 2007.
With truck sales a key indicator of the health of the economy, Swedish maker Scania said orders in western Europe fell by 69% in the third quarter and rival Volvo said it had seen a 55% fall in another sign of a looming global recession.
Volvo chief executive Leif Johansson said that after record sales and profits in the first two quarters, demand for heavy trucks had slowed far faster than expected because of the impact of the global crisis.
Demand was weak in the company's main market in Europe, and also in Japan, and signs were emerging that the economic climate was weakening in other parts of the world.
It said truck orders had fallen 41% overall - with Western Europe down 69% and Eastern Europe, a growth market, falling 45%.
Scania chairman Lief Ostling said that even orders in Russia had fallen. The European auto and truck market has been badly hit by the crisis with Opel of Germany and Fiat of Italy already announcing thousands of temporary layoffs.
Meanwhile, German car giant Volkswagen said today it would meet its 2008 sales target after delivering 4.8 million vehicles worldwide in the first nine months of the year, in contrast to gloom elsewhere in the European car sector.
The nine-month figure represented an increase of 3.9% from the same time in 2007, a statement issued by the biggest European car maker said.
'We note with concern that the situation for the global sector deteriorated markedly in September,' Wittig said however, while adding that the VW group had managed better than competitors.
In addition to the Volkswagen brand, VW owns Seat, Skoda and Audi, and it posted a slight sales increase of 0.7% in September as sales by rivals collapsed.
