The Volvo Group is adjusting its production rate, cost structure and inventory level to adapt to the decrease in sales of its trucks, buses and construction equipment due to global economic meltdown.

Senior vice-president and chairman, trucks Asia, Par Ostberg said global sales of its trucks had slumped by 30% to 50% depending on the markets since the fourth quarter of last year.

The Volvo Group manufactures Volvo, Renault and Nissan Diesel trucks. Its markets include Europe, North America, South-East Asia, India, China, South Korea and Japan.

Two-third of the group's annual revenue is contributed by its truck business. Last year, Volvo – which has 20% to 25% of the truck market in North America, Europe and Japan – recorded a revenue of US$40bil.

"Most markets that we are in are showing signs of deterioration but we are adjusting to the current slowdown as we have been through it before," he told a press conference yesterday.

Volvo Malaysia Sdn Bhd managing director Eric Leblanc said sales of its trucks in Malaysia had dropped by 10% in January and February year-on-year.

"We are not optimistic on the market development in Malaysia for the rest of the year," he said. Volvo, Renault and Nissan Diesel trucks collectively control about 45% to 50% of market share in Malaysia.

But, according to Ostberg, the group would continue integrating its business in Asia that it had been growing organically and via acquisitions since 2007. The Volvo Group had invested about US$3bil in Asia via acquisition.

"We are looking at integrating our manufacturing, sourcing and distributions divisions of different brand names. Asia is an important market to us as it contributes significantly to our group sales and bottom line. Futhermore, we want to be ready when the market eventually revives," he said.

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