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Volvo profits plummet as global sales slump

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Volvo profits plummet as global sales slump
17:17 CEST+02:00
Swedish carmaker Volvo reported an 84 percent drop in operating profit through the first half of the year compared to 2011 amid slumping sales and tough competition.

Volo Cars, owned by China's Geely Holdings, reported operating profit of 239 million kronor ($35.63 million) in the first six months of 2012, compared to 1.53 billion kronor during the same period last year.

Turnover rose to 65.3 billion kronor from 62.8 billion kronor the year before, while global sales also dropped 4.1 percent to 221,309 cars.

According to Volvo Cars CEO Stefan Jacoby, the economic uncertainties plaguing many of the carmakers major markets are likely to continue through the end of the year, and competition remains fierce.

"We find ourselves in a transition," he told reporters in Stockholm on Wednesday.

"We need to get used to the fact that we live in an unpredictable global environment."

Jacoby said a looming recession in the eurozone has already resulted in lower sales in southern Europe and Sweden.

Through August, Volvo sales in Sweden are down 12.4 percent to 32,145 cars.

Jacoby however rejected rumours of trouble with the building of Volvo's planned factory in China, saying the plant was scheduled to be in operation by 2014.

The worsening market conditions mean that Volvo will reduce production to 50 cars per hour at its factory in Torslanda near Gothenburg, resulting in the shedding of 287 positions provided by a staffing company.

But Jacoby said no layoffs of permanent staff were planned.

"For the moment, we have no ambitions to get rid of any of our full-time workers or managers," he said, according to TT.

TT/The Local/dl

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