Swedish truck maker Volvo Group posted its biggest-ever quarterly loss today as write-offs amounting to more than three billion kronor dented profitability.
The world's second-biggest truck maker said it made a net loss of 5.57 billion kronor (€507 million) in the period from April to June, down from a net profit of 5.15 billion kronor the same time a year ago.
Credit losses, personnel cutbacks and the costs of a deal struck with the United Auto Workers Union over healthcare, deepened its losses by 3.2 billion kronor, Volvo said in a statement.
The agreement with the US union representing auto workers absolves Volvo's Mack brand of responsibility for healthcare benefits for retired employees.
Volvo chief executive Leif Johansson said the company was also hit by weakening demand for its heavy goods and buses.
He said that the truck market ‘remains weak’ in Volvo's key markets of Europe, North America and Japan and reiterated the company's industry forecast for the rest of the year.
'We maintain our assessment that the total European market for heavy trucks will be at least halved in 2009 compared with 2008 and that the North American will decline by 30% to 40%,' he said in the statement.
Volvo's net sales fell by a third in the second quarter compared with the same period a year earlier.
The Swedish group's net sales fell by 32.7% to 53.9 million kronor (roughly €5 million euros) in the April to June period. Adjusted for currency changes and other factors, the decline was 45%.
