Volvo Cars reports sales, profits boost

Swedish automaker Volvo reported a profit of 2.34 billion kronor ($369 million) for 2010, marking a massive swing back into profit compared 2009.

Volvo Cars reports sales, profits boost

Volvo’s 2010 profits amounted to a an improvement of 7.5 billion kronor from 2009, the year that former US-based owner Ford brokered a deal to sell the then loss-making Swedish carmaker to China-based Geely.

“Now we’re readjusting, from defense to offense in all areas,” he told news agency TT.

Sales were up by 11.6 percent, landing on a total of roughly 373,000 cars sold in 2010, compared to 334,000 cars the previous year.

2010’s turnover was reported as 113 billion kronor, also marking a considerable increase from 2009 results.

Results continue to look good for Volvo in early 2011.

During the first quarter, the company turned a profit of 640 million kronor, which is an improvement of no less than 78 percent compared to the same period in 2010.

All regions have also reported an increase in sales volume.

“This is the fifth quarter in a row that we’ve shown profits. But we are vulnerable. We’re still like a small flower, dependant on several factors in our surroundings, and it will be some more years before Volvo is sustainably profitable,” Jacoby said.

He forecast some major investments during coming years, which may put Volvo under strain. Jacoby couldn’t promise that profits would continue for the rest of the year, remaining in his predictions for car sales in 2011.

“We see some possible storm clouds. Among other things the rising price of raw materials, and the strong Swedish krona, so I can’t promise continuing profits for the rest of the year, as we continue to grow,” he said,

Enterprise minister Maud Olofsson welcomed Volvo’s positive results.

“This is very good news. We had so much work when Volvo was in trouble. And at the same time, that showed that a strong commitment from the company, a strong financier with the muscles to develop both production and sales, is necessary. I also believe that the access that has been granted to the Chinese market has given the company an energy injection,” she told TT.

“Both management and employees have put in a great deal of work to reach this result, and I congratulate them,” concluded Olofsson.

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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.