German truck manufacturer MAN expects lower sales and earnings in 2013 after the net profit of the company in 2012 contracted to 189 million euros (USD253 million) in the face of Europe’s faltering economy.
According to a statement released by the company on Friday, “MAN Group will see a … decline in revenue and a disproportionately large drop in operating profit in 2013.”
“Despite the generally difficult economic conditions” in Europe, the statement added, the company plans to cut costs and boost efficiency in production by initiating “appropriate improvement measures.”
This comes after MAN reported a 24-percent drop in its 2012 net profit. The company’s operating profit also plunged 35 percent to 964 million euros.
In October 2012, the German company said it would shut down assembly lines at the Munich and Salzgitter sites as a result of the production cuts.
The German truck industry has been suffering from the effects of Europe’s financial crisis. Less freight is transported by road across the continent, and demand for trucks has been falling.
MAN is the commercial vehicle unit of German carmaker Volkswagen AG. Volkswagen acquired the Munich-based truck maker in 2011 as part of its plan to forge a truck alliance with its Swedish Scania brand to take on global leaders Daimler AG and Volvo.
Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, and Spain.
The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.
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