Scania says to cut European output for one month

Scania plans to halt its truck production in Europe for a month from mid-December, using flexibility options in employees' contacts, a company spokesman said on Wednesday.

The truck maker, which has plants in Sweden, the Netherlands and France, has been hit by a sharp fall in demand for commercial vehicles in recent months. Scania said it would close its European factories between Dec. 22 and Jan. 19.

"We will try to manage by using flexibility agreements with our employees to prepare for when it turns around again," Scania spokesman Hans-Ake Danielsson told Reuters, confirming a report on a local newspaper's website.

The firm, which also makes buses, said it would stop production in its bus facility in Sodertalje, Sweden, for four weeks instead of an original plan for a three-week closure.

Scania is the third European truck company to announce production cuts this week.

Sweden's other truck manufacturer, Volvo, said on Tuesday it would cut output in the fourth quarter, mainly in December, and said order bookings had fallen substantially.

German rival MAN said on Wednesday it planned to halt production in its various truck assembly plants for 40-50 days. It noted customers were having trouble getting financing.

"Everybody is stepping on the brakes," said Johan Trocme, analyst at Nordea.

"It will definitively have an impact," he added. "But the surprise value is non-existent considering Volvo signalled something similar yesterday. It was close to inevitable Scania would follow the industry."

Scania shares were down 4 percent at 60 crowns, while Stockholm's all-share index .OMXSPI was down 1.2 percent.

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