Swedish truck maker AB Volvo posted a bigger-than-expected fourth-quarter loss – but now sees signs of stabilisation.

Gothenburg-based Volvo Group, the world's second-biggest truck maker, reported an worse-than-expected operating loss of 2.3 billion kronor ($316 million) compared to a loss of 999 million a year ago.

Sales plunged 28 percent over the year to 218.4 billion kronor, and 23 percent in the fourth quarter to 59.8 billion kronor.

But the company said it now sees signs of improvement and that its main markets will retur to growth this year.

"In the fourth quarter, demand remained generally weak in our principal markets although we can see signs of recovery in an increasing number of markets," CEO Leif Johansson said.

The European market is expected to grow about 10 percent this year while the North American market will expand around 20-30 percent, the company said.

"Our current assessment, which is in line with the rest of the industry, is that both the European and U.S. markets for heavy trucks will start off weak and gradually improve during the year," the company said in a statement.

Earnings were hit by costs for restructuring and lay-offs as well as writedowns of inventory.