FRANKFURT (Reuters) – Traton made a lacklustre start on its debut on Friday, as shares in Volkswagen’s truck unit slipped below their initial public offering price.

The stock opened at 27 euros ($30.75), the IPO price in Europe’s second-largest listing of the year, before slipping to trade as much as 2.4 percent lower. Germany’s benchmark DAX index was up 0.5% at 1200 GMT.

Weak demand for German listings had forced VW to scale back its Traton IPO and it had already priced the offering at the low end of its target range.

“At first glance, markets don’t look that bad. But volumes have been low as risk averse investors hoard cash,” a banker working on the deal said.

The average daily turnover of Stoxx600 shares stood at 470 billion euros so far this year and the June median was 439 billion euros, compared with the 2018 daily average of almost 600 billion.

Global IPO volumes are down 30% in the year so far, Refinitiv data shows, while the European figure is at its lowest level since 2012 amid concern about the global economic outlook.

Online fashion retailer Global Fashion Group slashed its IPO offer price on Wednesday, citing “current market conditions”.

Volkswagen floated 11.5% of Traton’s shares after initially seeking to list a stake of up to 25% in a bid to put the company’s truck business on an independent footing.

The deal values Traton at 7.9 and 7.0 times its 2019 and 2020 earnings before interest and taxes, respectively, roughly in line with the valuation of its peer Volvo, two people close to the matter said.

The 1.55 billion euros ($1.77 billion) in proceeds from the offering will flow to parent Volkswagen which aims to use the funding to invest in mass producing electric cars.

Traton, which includes the MAN, Scania and Volkswagen trucks businesses wants to create a global trucks operation.

A flotation could give Traton the resources to deepen its relationship with U.S. truck maker Navistar International Corp, in which it owns a 16.85% stake.

Asked whether Volkswagen planned to buy out Navistar, Chairman Hans Dieter Poetsch said: “Today’s steps make many things possible. Currently there are no concrete plans.”

Traton Chief Executive Andreas Renschler said alliances with Navistar, Hino and Sinotruck gave Traton economies of scale. “We don’t need any further participation at all, there’s no need to always buy companies,” he said.

($1 = 0.8780 euros)