Affected by continued weak demand in the vehicles market, the Volvo Group said it lost $427.6 million in the third quarter, compared with an income of about $293.57 million for the third quarter of 2008.

"Demand for new vehicles and machinery in the third quarter, nevertheless, remained weak in most of the Volvo Group's markets," said Leif Johansson,
 president and CEO, in a statement.

The results were at least more promising than the second quarter's loss of $730 million, and the company remains positive about an upcoming recovery.

"Although the third quarter remained, as expected, challenging in terms of profitability, there are some positive signs indicating that the decline in demand has bottomed out and that we are now beginning a gradual recovery," said Johansson.

Net sales during the quarter slipped 31 percent to about $7.1 billion, versus about $10.24 billion in the year earlier. Earnings per share for the third quarter came out to a negative 21 cents.

The company's truck business didn't fare much better, with sales falling 42 percent, and inventory of new trucks dropping 19 percent in the period. Through September, the total market for heavy trucks in North America was down 42 percent to 81,900 trucks, compared to 140,300 trucks in the previous year, Volvo reports.

However, net order intake for trucks saw a boost of 20 percent over the second quarter. The company still forecasts that the North American heavy-duty truck market will fall by 30 to 40 percent in 2009. The company is also still not seeing much uptick in orders via 2010 pre-buy effects.

"We are approaching January 1, 2010 when new emissions regulations will be put in place in North America and when we will introduce trucks with virtually zero emissions of nitrogen oxide and particulates, which is very positive for the environment," Johansson said. "The new technology will lead to price increases for the trucks, which to date has not resulted in any notable pre-buy effects. Price increases may, however, have a delaying impact on the recovery of demand in 2010."