Saab in talks with Volvo on production: report

Saab Automobile and Volvo Cars are in talks for production collaboration, Reuters reported on Thursday, citing a spokesman from Saab owner Spyker Cars.

Saab in talks with Volvo on production: report
New Volvo President and CEO Stefan Jacoby

“We will not close any doors to anyone. There may well be interest in more cooperation with Saab, but we are not there yet,” Volvo Cars’ information director Olle Axelson told news agency TT.

“Saab is already currently buying services from us on a smaller scale because we have things that they do not.”

Other manufacturers may also be involved, he added. Axelson had told newspaper Dagens Industri that Volvo may launch Saab cooperation “in many areas.”

For example, he mentioned that Saab had rented Volvo’s test track in Hällered northwest of Borås for the launch of the new Saab 9-5. According to Axelson, executives at Volvo have not yet brought up the issue of closer cooperation with Saab.

New Volvo CEO Stefan Jacoby is now undertaking swift corporate restructuring with meetings once a week. Jacoby, who has expressed dissatisfaction with both Volvo’s products and strategies, has begun a review on overhauling the company’s entire product line, including the C70.

The convertible is built in Uddevalla by a Volvo joint venture in which Volvo Cars owns 40 percent and Italy’s high-end car designer firm Pininfarina has a 60 percent stake. Demand for the convertible has fallen sharply to the point where the plant now will be shut down for about one month.

“The internal review of all models have nothing to do with Saab,” said Axelson.

Jacoby wants to simplify the production of more uniform solutions. One approach may be reducing the number of models, he said during the ongoing Paris Motor Show.

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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.