Volvo would temporarily stop production at its Torslanda plant in Sweden for a week from October 29 to November 2, 2012 due to poor demand in the European vehicle market. The company’s announced production stoppage will occur during a traditional holiday week in Sweden.
Jan Gurander, Volvo’s Chief Financial Officer and acting Chief Executive Officer, remarked that since Europe is the main market for the Swedish carmaker, the continued recession in the continent is naturally affecting the demand for its cars.
Defending the production stoppage, Gurander said, that it is essential for the company to continue to use the “built-in flexibility” it has within its manufacturing system. Volvo’s latest production decision comes as the carmaker commenced on October 1, 2012 a reduction in its vehicle output at the Torslanda plant from 57 cars to 50 cars per hour.
Volvo said in the statement that there are no plans for changes to the permanent work force at the plant. Volvo, owned by Chinese group Zhejiang Geely Holding Group Ltd, saw its vehicle sales drop by as much as 10.6 percent in the first eight months of 2012 in the EU and EFTA regions, according to data from the industry organization ACEA.
This is larger than the 6.6-percent drop in overall sales posted by the carmakers in the EU and EFTA regions. During the Paris auto show in September, Doug Speck, Volvo\'s global head of marketing and sales, quipped that the carmaker was on course to increase worldwide sales to at least 800,000 vehicles by 2020. Volvo posted a 20.3 percent rise in global sales in 2011 to 449,225 vehicles.