June 18, 2012 / 7:08 AM / 6 years ago

UPDATE 1-Europe woes hit Volvo truck deliveries in May

* Europe deliveries down 17 pct, western Europe falls 23 pct

* Company says may ditch planned production increases

* North America market still bright

STOCKHOLM, June 18 (Reuters) - World number two truck maker Volvo said on Monday deliveries of its trucks fell 3 percent year-on-year in May amid weak demand in Europe, adding it was looking at whether to abandon planned increases in production on the continent.

Volvo, which sells trucks under the Renault, Mack, UD Trucks and Eicher brands as well as its own name, said unit shipments fell 17 percent in Europe, with western Europe falling 23 percent.

“Given the current economic development in Europe, we are evaluating if the announced increases in production rates will be implemented as planned,” the company said in a statement.

In April, the company had said it did not expect the European market - the group’s biggest - to contract this year as much it had originally thought and said it planned a slight increase in production.

It said then it expected the European market to contract to about 230,000 trucks this year compared with a previous estimate of 220,000. Last year, sales were 242,400.

Volvo’s gloom chimes with Swedish peer SKF, the world’s biggest bearing maker and a bellwether for the manufacturing industry, which warned last week of weakening demand in the second quarter.

Volvo saw deliveries in Asia drop 1 percent in May while deliveries in South America declined 19 percent, as a rules-driven switch to new engines hits demand in Brazil.

The main bright spot was North America, where a fitful upturn has been gathering pace as transporters move to replace ageing fleets and a moderate economic recovery takes hold. Deliveries there rose 31 percent in May.

The Russian market also remains strong and deliveries to eastern Europe were up 8 percent in May.

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