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CHINA

Volvo opens new China headquarters in Shanghai

Swedish automaker Volvo opened its new China headquarters in Shanghai on Tuesday in its latest bid to expand its market share in the country.

Volvo opens new China headquarters in Shanghai
Volvo China Chairman Freeman Shen

Volvo President and CEO Stefan Jacoby said the company’s Chinese presence had gone from being a sales arm to a full-fledged research and manufacturing operation within months.

“I am glad to see the China operations team has been set up and has made a huge progress over the last few months, expanding our business presence in China,” Jacoby said in a company statement.

The new headquarters on Shanghai’s northern outskirts will also include a technology development centre, the company said. Volvo officials declined to say how much the carmaker was investing in the facilities.

Chinese automaker Geely bought Volvo from Ford in August 2010 for $1.5 billion (9.85 billion kronor) and the Chinese carmaker aims to sell 800,000 Volvos in 2020, including 300,000 in China.

In 2010, Volvo sold 373,525 vehicles worldwide, with sales rising by 29 percent in northern Europe and 36 percent in China. Sales dropped 12 percent in the US to 53,952 vehicles, although it remained Volvo’s largest market.

China’s overall auto sales rose more than 32 percent to 18.06 million units last year following a banner year in 2009, in which the country overtook the US as the world’s top market.

“China is the world’s largest auto market. To capture the business growth and build Volvo Cars [into] an admired brand in China, [the company] has been strengthening the leadership team in China,” senior vice president and Volvo China Chairman Freeman Shen said in the statement.

“Our goal is to build Volvo cars one of the most admired luxury car brands,” he added.

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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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