Volvo Cars: record sales but declining profitability at 2Q

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Volvo Cars, the Swedish automaker owned by Chinese Geely, said Thursday it broke sales records in the second quarter but its profitability declines under the effect of pressure prices and tariffs.

Sales amounted to SKr 67.1 billion, up 1.7% year-on-year, for 179,506 vehicles sold (+ 5.4%), a level never before reached in a single quarter.

In terms of units sold, sales grew in all the manufacturer's markets, in Europe (+ 3.5%), the United States (+ 1.9%), and especially in China (+ 15.7%). ), its biggest national market.

Its operating profit Ebit simultaneously contracted by 38.5% to 2.6 billion, penalized by the pressure on prices while new vehicle registrations contract in Europe and China in particular.

Volvo Cars also highlights the negative impact of customs duties.

Last year Volvo Cars recorded a new sales record with more than 600,000 cars sold but profits eroded by the trade war between the United States and other economic powers like China or the European Union.

Acquired by Geely from American Ford in 2010, Volvo Cars has dramatically improved its accounts and brand image. He also bet on autonomous cars, where he is today one of the most advanced.

The company has initiated new savings measures, eliminating 750 jobs and reducing purchases of external services, hoping to achieve a recurring saving of one billion crowns from the second half.

"Further measures will reduce costs by an additional $ 1 billion by 2020," said CEO Håkan Samuelsson in the release.

In 2017, the Gothenburg Group announced that it would launch only electric or hybrid models starting in 2019, promising the "historic end" of vehicles equipped only with a combustion engine.

It is the first major manufacturer to plan to electrify all its models and to set a roadmap for the gradual abandonment of the internal combustion engine, a century and a half after its invention.

gab / hdy / Ith

VOLVO AB

FORD MOTOR

GEELY AUTOMOBILE HOLDINGS

18/07/2019 11:02:47 –
Stockholm, July 18, 2019 (AFP) –
© 2019 AFP

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