SHARE
COPY LINK

CHINA

Ford ‘examining Chinese Volvo bid’

Ford's chief executive Alan Mulally has said plans to sell Swedish subsidiary Volvo Cars are proceeding, despite rumours two weeks ago that Chinese automaker Geely had lost interest in the company.

The Wall Street Journal, citing sources close to the negotiations, reported on Thursday that Ford is currently analyzing a $2.5 billion bid from China’s Geely Holding Group.

Volvo Cars’ CEO Stephen Odell refused to comment on the rumours that Geely was to take over the company.

“It’s up to Ford, not us, to comment on the sale,” he said on Friday.

According to Swedish newspaper reports in mid-September, Ford had informed Volvo management that Geely had withdrawn a previous offer for the company.

Mikael Sällström, head of the union group at Volvo in Gothenburg, said workers were in the dark:

“Our problem is that we are being given too little information about a potential sale. We also know very little about Geely,” he said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

VOLVO

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.

SHOW COMMENTS