Volvo Cars will slow production in the New Year as it rebalances supply against demand.
The company, which has already adjusted production a number of times since summer, said it will cut the number of cars made each hour to 45 at its Torslanda plant in Sweden, beginning in the fourth week of January.
Since October the plant has made 50 cars an hour, having previously produced 57 cars an hour.
Volvo Cars also said it will make 5,500 fewer cars in December by implementing three production-free days at the Torslanda plant as well as two production-free days at its plant in Ghent, Belgium, where it produced nearly 60% of its 449,000 cars in 2011.
Lars Wrebo, senior vice president manufacturing at Volvo Cars, said the continuous decline in customer demand in 2012 has so far has not picked up, hence the need of further adjustment to production.
It had previously announced the 2013 closure of its Uddevalla plant which builds the low-volume convertible C70.
Europe is Volvo's largest market.