Volvo says China truck sales flat in 2006

SHANGHAI, Oct 31 (Reuters) The world's number-two truck maker, Volvo AB, projects flat truck sales in China in 2006, but expects sales to grow at a double-digit rate next year as it adapts to Beijing's policy changes.

Volvo is estimated to move between 1,100 and 1,200 trucks in the world's second-largest auto market this year, Fredrik Hogberg, president of Volvo Truck Greater China, told Reuters on the sidelines of a business forum in Shanghai on Tuesday.

''There's not really any growth this year,'' Hogberg said, blaming Beijing's new rules on weight load issued in 2004, which forced the auto maker to shift its customer focus.

''In 2004, we had a big bump and now we are doing OK,'' he said, adding sales could grow at a double-digit rate in 2007.

Earlier this year, Volvo's partner, China National Heavy-Duty Truck Corp., said it was aiming for an initial public offering in Hong Kong this year to fund an expansion drive that it hopes will more than double its sales by 2010.

Hogberg declined to say whether Volvo would take a strategic stake in China National prior to the share sale, or speculate about the impact of the IPO on their manufacturing joint venture.

The Swedish giant, which also produces buses, aircraft and boat engines, has two other manufacturing ventures in China making city buses and coaches.

REUTERS PV DS1642