Why Volvo remains optimistic despite huge losses
Swedish car maker Volvo predicted it would bounce back in the second half of 2020, despite its results in the first half taking a big hit from the coronavirus.
With sales falling by 14 percent from January through June, Volvo, which is owned by the Chinese car maker Geely, said it was poised to bounce back after gaining market share in China, the United States, and Europe.
The company nonetheless posted a first half net loss of 1.17 billion kronor (114 million euros, $130 million), compared with a net profit of 3.4 billion kronor for the same period a year earlier.
"The downturn we saw in the first half is a temporary one," a statement quoted chief executive Håkan Samuelsson as saying. "We expect to see a strong recovery in the second half of the year."
Unit sales were 21 percent lower at 269,962 vehicles, with China accounting for almost one quarter and the United States for 16 percent.
Volvo's domestic market represented nine percent of its sales, while Germany "was among the strongest performing markets," the statement said.
The company's operating results also showed a loss however, of 989 million kronor, down from a profit of more than 5.5 billion during the comparable period a year earlier.
Looking ahead, the company said that in addition to gaining market share in China, the US and Europe, "it also saw a strong increase, of 79.8 percent, in demand for its chargeable plug-in hybrid models."
Volvo station wagons have sold well since Geely bought the company from Ford in 2010, and its line of sports utility vehicles (SUVs) are now its most popular.
Volvo Cars is a separate company from the independent Volvo Group, which makes heavy trucks.
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With sales falling by 14 percent from January through June, Volvo, which is owned by the Chinese car maker Geely, said it was poised to bounce back after gaining market share in China, the United States, and Europe.
The company nonetheless posted a first half net loss of 1.17 billion kronor (114 million euros, $130 million), compared with a net profit of 3.4 billion kronor for the same period a year earlier.
"The downturn we saw in the first half is a temporary one," a statement quoted chief executive Håkan Samuelsson as saying. "We expect to see a strong recovery in the second half of the year."
Unit sales were 21 percent lower at 269,962 vehicles, with China accounting for almost one quarter and the United States for 16 percent.
Volvo's domestic market represented nine percent of its sales, while Germany "was among the strongest performing markets," the statement said.
The company's operating results also showed a loss however, of 989 million kronor, down from a profit of more than 5.5 billion during the comparable period a year earlier.
Looking ahead, the company said that in addition to gaining market share in China, the US and Europe, "it also saw a strong increase, of 79.8 percent, in demand for its chargeable plug-in hybrid models."
Volvo station wagons have sold well since Geely bought the company from Ford in 2010, and its line of sports utility vehicles (SUVs) are now its most popular.
Volvo Cars is a separate company from the independent Volvo Group, which makes heavy trucks.
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