STOCKHOLM: World number two truck maker Volvo on Tuesday missed third quarter profit forecasts and readied production cuts ahead of an expected fall in the European market next year.
It also expected a weaker Brazilian market next year while North America and Japan would grow.
"In Europe, we have noted a slight slowdown recently," said chief executive Olof Persson, who took over in September.
"Production rates, which were slightly increased in August, are currently somewhat higher than the order-intake rate, which is why we are preparing to reduce manufacturing rates in the European production system in the beginning of next year," he added in a statement.
For 2012, the group forecast a decline in the European market of about 10 percent and a rise in the North American market of 20 percent.
The group reported a third quarter operating profit of 5.8 billion crowns ($884 million) versus a forecast 6.2 billion crowns in a Reuters poll and last year's 4.9 billion crowns.
Third quarter operating margin came in at 7.9 percent versus an expected 8.6 percent in the Reuters poll.
The company, which competes against world number one Daimler, said the truck market in Europe would come in this year at 240,000 units, the top end of its forecast range of 230,000 to 240,000.
Demand was good in northern Europe and Russia but southern Europe and parts of eastern Europe were weaker, it said.
The North American market, however, would undershoot expectations for 2011, with sales of 210,000 trucks rather than the forecast 230,000 to 240,000.
It said it expected demand in the North American market to rise in 2012 as customers would be attracted by new trucks with lower fuel usage. It saw the market in Japan rising 20 percent next year and falling in Brazil by about 10 percent.
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