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CARS

China push puts Volvo back in black in 2013

Volvo Cars posted annual profits last year after losses in 2012, thanks to a focus on the Chinese market and a tighter cost control, the company announced on Tuesday.

China push puts Volvo back in black in 2013
"I can already say that we're back in black," chief executive Håkan Samuelsson said in an interview with Swedish financial daily Dagens Industri at the Detroit auto show in the United States.
   
"Last year we focused on two things: costs control and the Chinese market. And we've been successful."
   
Samuelsson explained that Volvo Cars, the Swedish subsidiary of Chinese automaker Geely, had "saved almost 1.5 billion kronor" ($232 million) in fixed costs during the year and pointed out that sales in China had increased by 46 percent.
 
The company had recovered from a first half year in the red, with 778 million kronor losses, preceded by three six-month periods of negative figures in a row.
   
The detailed report from the company is expected by the end of March.    
 
Volvo Cars was acquired in 2010 by Geely, which manufactures brands such as Geely, Gleagle, Emgrand and Englon, unknown in the West.

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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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