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Sweden’s Volvo Cars increases sales in 2010

After two straight years of slumping sales, Sweden's Volvo Cars bounced back in 2010 despite continued weakness in the US.

Sweden's Volvo Cars increases sales in 2010

Global sales grew 11.2 percent to 373,525 compared with 334,808 in 2009, the company said in a statement on Friday. However, the figure is still shy of the 374,297 cars sold in 2008, when sales declined from 458,323 the previous year.

“For the Volvo Car Corporation, 2010 was a year of changes…On August 2nd, Zhejiang Geely Holding Group completed the acquisition of 100 percent of the Volvo Car Corporation from Ford Motor Company,” corporate spokesman Per-Åke Fröberg said in a statement on Friday.

“The Volvo Car Corporation returned to profit in the first quarter of 2010 and kept up the momentum throughout the year,” he added.

In addition, Volvo sales continue to fall in the US despite a rebound in the auto sector, with US auto sales rising to their highest rate in 16 months in December. US sales fell 12.2 percent or 7,474 to 53,952.

Sweden will soon overtake the US as Volvo’s biggest market, the company added.

In China, sales increased by 36.2 percent and 29 percent in Nordic countries. Other strong markets included Russia, where sales increased by 54.5 percent, Belgium by 35.9 percent and Norway by 38.9 percent.

The XC60 compact crossover remained Volvo’s best-selling car, selling 80,732 worldwide last year, followed by two station wagons: the V50 with 56,098 units sold and the V70, selling 48,872 units.

The XC60 and V50 are manufactured in Ghent, Belgium, while the V70 is produced in Torslanda, outside of Gothenburg in western Sweden. In 2010, Volvo recruited about 500 additional staff to work at these two plants, with some of these positions becoming permanent.

Other manufacturing locations include Uddevalla northwest of Trollhättan in western Sweden, Chongqing in western China, Thailand and Malaysia.

After naming CEO and Geely Chairman Li Shufu as its chairman on July 15, the company also appointed Stefan Jacoby as president and CEO several weeks later and presented a new board in connection with the new ownership.

The company highlighted the positive reception the company has received to the launch of the new Volvo S60 sedan and V60 estate car last year in its annual review.

It also unveiled a new five-cylinder two-litre diesel engine design for the S60, bringing fuel consumption down to an estimated 5.3 litres per 100 kilometres with a manual gearbox.

The Volvo S60 was launched at the Geneva Motor Show in early March and features pedestrian detection with full auto brake.

Separately, at the biennial 2010 Paris Motor Show in October, Jacoby confirmed plans for Volvo’s launch of a plug-in V60 hybrid next year and noted that the foundation for the hybrid would be the V60 model.

The V60 plug-in hybrid will have carbon dioxide emissions of just 49 grammes per kilometre and the car will be equipped with a battery that can be recharged in four to six hours and provide up to 50 kilometres in pure electric range.

Both car models include a new infotainment system where information about the audio system, navigation unit, mobile phone and other functions is presented on a 13- to 18-centimetre colour screen.

The company also emphasised its pledge to develop cars entirely free from exhaust emissions and carbon dioxide.

Measures include the introduction of high-efficiency diesel models with very low CO2 emissions, an electrification strategy with a test fleet of C30 Electric and market introduction of plug-in hybrids as early as next year.

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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.

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