‘No comment’ from Renault on reported Volvo interest

Renault SA refused to comment on a report in Swedish newspaper Dagens Industri that it may buy Volvo Cars from current owners Ford Motor Corp.

Contacted by Thomson Financial, a spokeswoman for the French car marker said: “We have no comment to make on press speculation.”

Dagens Industri on Wednesday cited unnamed sources as saying Renault would be interested in buying Volvo Cars from Ford, while AB Volvo, in which Renault owns a 20 percentstake, would potentially become a minority shareholder with 10-20 percent of Volvo Cars.

The Renault spokeswoman reiterated that since January 1982, Renault has had a cooperation agreement with Volvo Cars, under which the Swedish company distributes Renault cars and provides after-sales services in Nordic countries.

As announced in August last year, the partnership is due to come to an end on Dec 31 this year, she explained.

Renault said this morning it is planning to launch its own distribution and service unit in Sweden, Norway, Finland and Denmark.


Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.