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European truck demand slumps on economic turmoil

Soedertaelje, Sweden: Scania AB, the Swedish truck maker controlled by Volkswagen AG, plans to lower production at European factories by as much as 15% from next month as demand for commercial vehicles drops.

“Government financial problems in Europe and the US have now begun to affect economic activity and have led to hesitation among customers,” the company said in a statement today.

Scania will lower vehicle production rates in the region starting in November by 10 to  15% compared with the end of the third quarter, the truck maker said.

Scania is the first of the European truck makers to announce production reductions over concerns the region’s economy is cooling. Transport is an early indicator of economic output as transport companies adjust their fleets to meet reduced demand. Road transport accounts for 72.6% of all inland freight transported in the European Union, according to industry association ACEA.

Daimler’s truck factories have sufficient orders to operate at full capacity until at least the first quarter of 2012, Heinz Gottwick, a spokesman Stuttgart, Germany-based company, told Bloomberg today. Daimler chief executive Dieter Zetsche said in September the company was optimistic about its truck operations, even with the debt crisis, because of demand for the revamped Mercedes-Benz Actros long-haul model.

Stefan Straub, a MAN spokesman, told Bloomberg today: “We are monitoring closely how the uncertainty from the financial crisis affects us and are prepared to make cuts at various levels should they be necessary,”

“We are not expecting a major slump. It is all dependent on how the market develops, but cuts are certainly a possibility.”

Scania is dependent on Europe, with the region accounting for 45% of first-half deliveries. Heavy truck sales in Europe gained 30% in August, slowing eight-month growth to 49%, as customers began delaying purchases, according to the most recent data from the European Automobile Manufacturers’ Association.