We're going down to maybe 280,000 vehicles instead of the 300,000 we had hoped for, says Christian Levin about the prognosis for International's sales in North America this year.
There's a huge uncertainty. All major purchases are being postponed for the future because you want to first understand what happens with the tariffs and what happens with inflation. And if we get inflation in the US, what happens with the interest rate? If it gets high, it will be expensive to invest. It's a very uncomfortable situation in the US right now, he adds.
More measures may be needed
The downsizing that has now been done at International's factory in Mexico may be followed by more measures to handle the tariff shock, according to Levin.
If this continues, we must take further measures. Without volumes, we have no chance of making money, he says.
In contrast to Scania and MAN – Traton's European brands – International in North America does not have the same service segment that generates revenue when new vehicle sales decrease. There is also a lack of the same type of finance company in North America that the group has in Europe.
We're working on changing that. It's part of our strategic plan, says Levin.
Among other things, they have started selling International vehicles with self-manufactured engines and gearboxes, which provides the opportunity to offer service services.
But it naturally takes many years before we're fully there. So we're much more exposed (to volume downturns) in North America than we are in our European business.
Don't know what applies tomorrow
He doesn't want to speculate on whether Trump can succeed in forcing International to move production to the US with tariffs:
That's not something I either want or can speculate about. Right now, we're handling short-term fluctuations.
What's difficult with the US right now is that you don't know what applies tomorrow – you can't make any investment decisions based on the information we have now.
