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CEO: 'very difficult' for Volvo Cars to avoid loss

CEO: 'very difficult' for Volvo Cars to avoid loss

Published: 19 Dec 2012 07:09 GMT+01:00
Updated: 19 Dec 2012 07:09 GMT+01:00

The chief executive of Volvo Cars, which is owned by Chinese auto maker Geely, told a newspaper on Tuesday that it would be "very difficult" for the company to avoid making a loss this year and the next.

The company's target of breaking even on an operational level this year would be "very, very difficult to reach," Håkan Samuelsson told the Financial Times, adding that for next year, "the target is still to break even, but that will also be very tough."

Speaking to the press for the first time since taking the helm of the company in October, Samuelsson also told Swedish business daily Dagens Industri that Volvo expected to sell "in the order of" 400,000 to 410,000 cars next year.

Volvo sold 383,000 cars in the first 11 months of this year, which was six percent fewer than in same period last year.

Chinese parent company Geely exports vehicles to more than 40 developing countries in eastern Europe, Latin America, the Middle East, Africa and Southeast Asia.

It also operates assembly plants in several countries including Russia and Indonesia.

It bought Volvo Cars from Ford in 2010, but the iconic Swedish brand has since seen its market share decline and profits dwindle.

In the first 11 months of the year, Volvo's sales in China fell at a faster pace than in its other markets, even though the company had said it would make the country a priority.

AFP/The Local/dl

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Your comments about this article

04:10 December 20, 2012 by benkku
Do I wonder?

No. On my V70 the control panel went broken. I asked the local dealer about costs to fix it, he told that it is Euro 1300. After a quick check in the internet I found, that this is a common problem and the costs to fix it are between 290 and 390 Euros when done in Germany.

I wrote to Volvo about this and did not get any answer. They simply did not care.

So: I am no Volvo-customer any more. I am sure, I am not the only one who learned about the customerrelations of Volvo and took the consequences.
19:03 December 21, 2012 by Escort
Volvo's strategy makes no sense. Their cars, particularly the V40, are overpriced as they are now trying to compete directly with BMW and Audi. This could be a dangerous strategy in the longer term as the brand doesn't really have the kudos to compete with German luxury marques and they run the risk of alienating customers who would normally buy mainstream brands like VW and Ford.

As Volvo have now axed the C30 (I think today is the last day of production) they desperately need an AFFORDABLE sub-V40 car to compete with the Audi A1/Polo/Mini/Fiesta. As I get the feeling that they are more interested in the lucrative business sector than private buyers like myself I will be buying Ford or Honda instead of Volvo next time. A shame as I have been a satisfied Volvo customer for 18 years.
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