Volvo Cars reports loss amid bump in sales

Volvo Cars reports loss amid bump in sales
Volvo Cars on Wednesday reported an operating loss of 577 million kronor ($87 million) for the first half of the year, but expects to break even as the year as sales rose in August.

The result is a stark contrast to those reported for the same period last year, when the company, now wholly owned by China’s Zhejiang Geely Holding Group, earned 349 million kronor.

The company attributed the negative result to high discount levels and unfavourable exchange rates.

“The result is as expected and in line with the challenging targets we have set ourselves,” Volvo Car Group CEO Håkan Samuelsson said in a statement.

“We are adjusting to market circumstances by implementing a cost-savings programme and reviewing costs in all areas of our business.”

Volvo also reported a monthly global retail sales rise of 4.7 percent for August compared to 2012, selling 26,998 units for the month in 2013. In China, Volvo sales jumped up by 66 percent for August. However, global sales remained down by 2.5 percent globally from January through August.

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While sales in Sweden also dipped by 1.2 percent in August to 2,981 cars, the company said it maintained a leading position in the market.

The United States, meanwhile, became Volvo’s number one market in August, will 5,519 cars sold, despite a decrease of 11.9 per cent compared to the same month last year.

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