Volvo owners to push car sales abroad: report

Chinese automaker Geely said Wednesday it will begin assembling cars in Egypt this year with a local partner, marking its latest push overseas as domestic demand hits the brakes.

Volvo owners to push car sales abroad: report

Geely Holding Group, which owns Swedish nameplate Volvo, will work with GB

Auto to assemble passenger vehicles for distribution across North Africa, the

Chinese company said in a statement.

The production line will have an initial capacity of 30,000 units a year, the statement said. Financial details were not provided.

The move highlights the growing global ambitions of Chinese automakers such as Geely, which bought Volvo from US auto giant Ford in 2010 for $1.5 billion, less than a quarter of what Ford paid for the company in 1999.

Geely said in December that it was aiming to start selling its Emgrand EC7 sedan through a network of 30-40 dealerships around Britain by the end of this year, as it seeks to boost its presence in developed markets.

The ambitious car maker already exports vehicles to more than 40 developing countries in eastern Europe, Latin America, the Middle East, Africa and Southeast Asia.

It also operates assembly plants in several countries including Russia and Indonesia.

Great Wall Motor on Tuesday became the first Chinese automaker to open an assembly plant in Europe, aiming to produce 50,000 vehicles per year for the whole continent in northern Bulgaria.

The overseas push by Chinese companies comes as sales in the world’s biggest auto market hit the brakes after Beijing rolled back sales incentives and some cities imposed tough restrictions on car numbers to ease traffic congestion and pollution.

Nationwide sales rose just 2.5 percent in 2011 to 18.51 million units compared with an increase of more than 32 percent in 2010.

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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.