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. Last Updated: 07/27/2016

Volvo Sees Lower Sales Growth

Sweden's Volvo Trucks expects disappointing sales growth of 25 percent on the Russian market to 15,000 vehicles in the next few years, the managing director of its Russian unit said in an interview.

"For sure, we are disappointed, but you can't expect to grow 100 percent every year," said Lars Corneliusson, managing director of Volvo's Russia unit.

He added that the Russian truck market as a whole can reasonably expect to see a decline in sales of between 20 percent and 50 percent in 2009.

This decline comes as banks cut off lending to many of Volvo's top Russian clients -- including in the construction, metals, cement and engineering sectors -- forcing them to freeze projects and delay the renewal of their vehicle fleets.

"Clearly, the banks are not doing enough because there is not enough financing out there," Corneliusson said. "It puts tremendous uncertainty on an investment decision our customers would make."

On Jan. 19, Volvo opened a $100 million factory in the city of Kaluga, west of Moscow, that will be able to produce 15,000 Volvo trucks per year.

"Obviously, the current market state makes it very difficult to predict when that capacity will be fully utilized," Corneliusson added.

Volvo's Russian market share is expected to grow during the global financial crisis to around 10 percent, Corneliusson said.