Truck maker Volvo has posted a deeper than expected second-quarter loss and stands by its forecast that the economic downturn would see its main markets shrivel this year.

However, the drain of cash from the group slowed considerably in the quarter compared with the previous three months. The Swedish vehicles maker said it had managed to cut inventories further as it adjusted to the plunging demand.

Handelsbanken analyst Hampus Engellau said cash flow was in line with what he had expected. “I think market expectations were for a much more negative cash flow.”

Volvo reported an operating loss of 6.9 billion krona (€634 million), down from a 7.2 billion krona profit a year ago. – (Reuters)