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Volvo Cars says turnaround plan on track despite Q2 losses
Volvo Cars says turnaround plan on track despite Q2 losses

Yahoo

time18 hours ago

  • Automotive
  • Yahoo

Volvo Cars says turnaround plan on track despite Q2 losses

Geely-owned Volvo Cars has reported a significant loss for the second quarter (Q2) of 2025, with a group operating profit (EBIT) down by Skr10.0bn ($1.02bn) compared to Skr8.0bn in Q2 2024, reflecting ongoing challenges within the automotive industry. Despite this, the company said that its Skr18bn ($1.84bn) cost and cash turnaround plan is progressing as expected, with full effects anticipated in 2026. Q2 revenues fell to Skr93.5bn from Skr101.5bn reported in the same period of the previous year, and the EBIT margin dropped from 7.9% to -10.6%. The Q2 EBIT includes items affecting comparability of Skr12.9bn, comprising an impairment of Skr11.4bn and a Skr1.4bn restructuring charge. Excluding these items, the EBIT was Skr2.9bn, with an EBIT margin of 3.1%. The impairment charge was attributed to the adjustment of 'financial assumptions for the EX90 and ES90 platform', import tariffs, and delays for the EX90. Additionally, a one-time restructuring cost of Skr1.4bn was linked to a decrease of 3,000 headcounts. Retail sales also experienced a decline, with 181,600 cars sold in Q2, a 12% decrease from the same period last year. The Skr18bn turnaround plan, introduced in early 2025, is already having an impact, with the reduction of 3,000 positions underway, and nearly 1,100 employees having left the company. Volvo Cars said that it is taking steps to minimise material expenses, including leveraging synergies within the Geely group and partnering on procurement. The company is also reducing working capital and investment pace, easing off investment volume, as major investments are being made in new product architecture. This will bring cost decreases and performance improvements, starting with the new Volvo EX60. Electrification remains a key focus of the company, with analysts predicting that 'demand for fully electric cars' will continue to grow, potentially outpacing traditional combustion engine cars by 2030. Volvo Cars noted that it will 'refresh' its plug-in hybrid (PHEV) offerings, starting with the all-new XC70 extended-range PHEV, set to launch in China in Q3. New governance models are being implemented by the company in China and the Americas, and the local assembly of the XC60 SUV in the US will help reduce the effects of import tariffs. Despite a challenging 2025, Volvo Cars is focusing on driving sales, including the EX30 and the 90 Series electric vehicles. The EX60 is also on track to strengthen the company's electric lineup. Volvo Cars CEO and president Håkan Samuelsson said: 'Demand remains under pressure from the macroeconomic environment, tariff-related uncertainties and tougher competition. 'However, our turnaround actions are starting to show results. In a Q2 market with headwinds we made a clear improvement of free cash flow versus Q1 and our EBIT margin excluding items affecting comparability was slightly higher.' "Volvo Cars says turnaround plan on track despite Q2 losses" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio

Volvo Cuts US Lineup to Survive Against Trump's Tariffs
Volvo Cuts US Lineup to Survive Against Trump's Tariffs

Miami Herald

time2 days ago

  • Automotive
  • Miami Herald

Volvo Cuts US Lineup to Survive Against Trump's Tariffs

According to reports by both Reuters and Automotive News, Swedish automaker Volvo is making some drastic cuts to its lineup to turn a profit as President Donald Trump's tariffs make it harder to sell a broad range of vehicles in the U.S. Previously, Volvo offered a range of sedans and station wagons alongside a selection of crossover SUVs; however, the Geely-owned automaker said that it will fully phase out these cars from its U.S. offerings due to declining consumer demand and complications from import tariffs. According to a Volvo spokesperson who spoke to AutoNews, Volvo will cease offering the Chinese-assembled S90 and the Swedish and Belgian-assembled V60 wagons in the U.S. starting in the 2026 model year. This leaves the V60 Cross Country as the only non-SUV in Volvo's U.S. lineup. This decision comes as the U.S. has levied tariffs of 27.5% on European-made cars and 100% on EVs imported from China, forcing automakers to review their product strategies. In light of this, Volvo Cars CEO Håkan Samuelsson said in remarks on CNBC's Europe Early Edition on July 17 that the company would "definitely not" pull out of the U.S. market, where it has been present for 70 years, adding that it will bring the XC60 into production in the U.S. "What we are doing is, first of all, we want to fill our factory that we have in South Carolina. It should be the strategic asset it was intended to be. So, we have to utilize it more," Samuelsson said. "Second, of course, now with the tariffs, it is very natural to bring in a [car model with] big-selling volume. We are bringing in the XC60 SUV," he added. Following a July 16 announcement, Samuelsson said during Volvo Cars' Q2 2025 earnings call on July 17 that U.S. production of the XC60 will ramp up in early 2027. Despite currently being tasked with EX90 and Polestar 3 production, Volvo's South Carolina assembly plant only made about 20,000 vehicles last year-just 13% of its capacity. The XC60 "will bring high volumes to the factory [and] together with the increase in the EX90, will give that factory much better utilization," Samuelsson said. Volvo CFO Fredrik Hansson added that the cost of localizing XC60 production is in the "very low single-digit billion [U.S. Dollars]." as it previously built the S60 sedan, which is mechanically similar to the XC60. "The plant is already adapted for that production," Hansson said. "That means we can find very cost-efficient ways to [build the XC60]." Following the announcement of a 10 billion Swedish kronor ($1 billion) Q2 2025 operating loss, Volvo Cars CEO Hakan Samuelsson said that the European Union should reduce its tariffs on U.S. car imports while politicians in Brussels work toward a trade agreement with the Trump administration. "If Europe is for free trade, we should be the ones showing the way and going down to very low tariffs first," Samuelsson told Reuters, adding that European automakers do not need protection from U.S. competitors. "I think it's absolutely unnecessary, the European car industry definitely does not need to have any protection from American auto builders." In a series of letters written to the leaders of other countries and key trading partners, President Donald Trump has threatened to raise tariffs on imported goods from the EU to 30% on Aug. 1. Previously, the U.S. had a 2.5% tariff on EU-built cars, while the EU had a 10% tariff on imported vehicles from the U.S. However, Samuelsson recognizes that he has limited say as a businessperson and can only limit his company's exposure to it. "These are the measures we have control over, rather than when it comes to tariffs, we can only have an opinion like everybody else," he said. In remarks to Reuters, Bill Wallace, the owner of the Wallace Automotive Group, which owns Volvo retail locations in Florida, told the newswire that in the luxury segment that Volvo competes for buyers in, shoppers are quick to pick other brands if pricing becomes an issue. "At the end of the day, even with a luxury model, they are going to compare their payment with a BMW, Lexus, or a similar model … and if it's a little bit higher … you're just gonna lose the business," he said. Wallace does have a point. Although Volvo has a reputation for building and selling fairly attractive and solid mild hybrid and plug-in hybrid luxury SUVs, it is doing so in a crowded market. To make matters worse, Mercedes and BMW's answers to the XC90 are both made in the United States. As I said before, Volvo CEO Samuelsson may be determined to increase American production of its high-volume models while the U.S. engages in challenging trade discussions with nearly every nation, but any decisions about the company's future must be carefully calculated if it wants to continue selling in the U.S. from here on out. Copyright 2025 The Arena Group, Inc. All Rights Reserved.

Volvo Cuts US Lineup to Survive Against Trump's Tariffs
Volvo Cuts US Lineup to Survive Against Trump's Tariffs

Auto Blog

time2 days ago

  • Automotive
  • Auto Blog

Volvo Cuts US Lineup to Survive Against Trump's Tariffs

By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. View post: Amazon is selling a 'powerful' $100 cordless impact wrench for only $50, and shoppers say it's 'a beast' Another victim of tariffs According to reports by both Reuters and Automotive News, Swedish automaker Volvo is making some drastic cuts to its lineup to turn a profit as President Donald Trump's tariffs make it harder to sell a broad range of vehicles in the U.S. Previously, Volvo offered a range of sedans and station wagons alongside a selection of crossover SUVs; however, the Geely-owned automaker said that it will fully phase out these cars from its U.S. offerings due to declining consumer demand and complications from import tariffs. According to a Volvo spokesperson who spoke to AutoNews, Volvo will cease offering the Chinese-assembled S90 and the Swedish and Belgian-assembled V60 wagons in the U.S. starting in the 2026 model year. This leaves the V60 Cross Country as the only non-SUV in Volvo's U.S. lineup. Volvo will ramp up U.S. production of popular SUVs This decision comes as the U.S. has levied tariffs of 27.5% on European-made cars and 100% on EVs imported from China, forcing automakers to review their product strategies. In light of this, Volvo Cars CEO Håkan Samuelsson said in remarks on CNBC's Europe Early Edition on July 17 that the company would 'definitely not' pull out of the U.S. market, where it has been present for 70 years, adding that it will bring the XC60 into production in the U.S. 'What we are doing is, first of all, we want to fill our factory that we have in South Carolina. It should be the strategic asset it was intended to be. So, we have to utilize it more,' Samuelsson said. 'Second, of course, now with the tariffs, it is very natural to bring in a [car model with] big-selling volume. We are bringing in the XC60 SUV,' he added. Following a July 16 announcement, Samuelsson said during Volvo Cars' Q2 2025 earnings call on July 17 that U.S. production of the XC60 will ramp up in early 2027. Despite currently being tasked with EX90 and Polestar 3 production, Volvo's South Carolina assembly plant only made about 20,000 vehicles last year—just 13% of its capacity. The XC60 'will bring high volumes to the factory [and] together with the increase in the EX90, will give that factory much better utilization,' Samuelsson said. Volvo CFO Fredrik Hansson added that the cost of localizing XC60 production is in the 'very low single-digit billion [U.S. Dollars].' as it previously built the S60 sedan, which is mechanically similar to the XC60. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. 'The plant is already adapted for that production,' Hansson said. 'That means we can find very cost-efficient ways to [build the XC60].' Source: Volvo Volvo CEO urges EU to drop tariffs against the US Following the announcement of a 10 billion Swedish kronor ($1 billion) Q2 2025 operating loss, Volvo Cars CEO Hakan Samuelsson said that the European Union should reduce its tariffs on U.S. car imports while politicians in Brussels work toward a trade agreement with the Trump administration. 'If Europe is for free trade, we should be the ones showing the way and going down to very low tariffs first,' Samuelsson told Reuters, adding that European automakers do not need protection from U.S. competitors. 'I think it's absolutely unnecessary, the European car industry definitely does not need to have any protection from American auto builders.' In a series of letters written to the leaders of other countries and key trading partners, President Donald Trump has threatened to raise tariffs on imported goods from the EU to 30% on Aug. 1. Previously, the U.S. had a 2.5% tariff on EU-built cars, while the EU had a 10% tariff on imported vehicles from the U.S. However, Samuelsson recognizes that he has limited say as a businessperson and can only limit his company's exposure to it. 'These are the measures we have control over, rather than when it comes to tariffs, we can only have an opinion like everybody else,' he said. The XC60 overtakes the 240 to become Volvo's best seller Final thoughts In remarks to Reuters, Bill Wallace, the owner of the Wallace Automotive Group, which owns Volvo retail locations in Florida, told the newswire that in the luxury segment that Volvo competes for buyers in, shoppers are quick to pick other brands if pricing becomes an issue. 'At the end of the day, even with a luxury model, they are going to compare their payment with a BMW, Lexus, or a similar model … and if it's a little bit higher … you're just gonna lose the business,' he said. Wallace does have a point. Although Volvo has a reputation for building and selling fairly attractive and solid mild hybrid and plug-in hybrid luxury SUVs, it is doing so in a crowded market. To make matters worse, Mercedes and BMW's answers to the XC90 are both made in the United States. As I said before, Volvo CEO Samuelsson may be determined to increase American production of its high-volume models while the U.S. engages in challenging trade discussions with nearly every nation, but any decisions about the company's future must be carefully calculated if it wants to continue selling in the U.S. from here on out. About the Author James Ochoa View Profile

Volvo Cars swings into loss on electric vehicles, tariffs
Volvo Cars swings into loss on electric vehicles, tariffs

Iraqi News

time3 days ago

  • Automotive
  • Iraqi News

Volvo Cars swings into loss on electric vehicles, tariffs

Stockholm – Volvo Cars announced on Thursday it had swung into loss in the second quarter, after it took an impairment charge for its electric cars, booked restructuring charges and dealt with a slower, tariff-troubled market. The net loss of 8.1 billion kronor ($830 million) was due to a 11.4-billion-kronor writedown in the value of its EX90 electric SUV and ES90 electric sedan due to production delays, higher development costs than planned and now US tariffs making sales there unprofitable. 'Demand remains under pressure from the macroeconomic environment, tariff-related uncertainties and tougher competition,' chief executive Hakan Samuelsson said in the quarterly earnings report. The Sweden-based manufacturer owned by China's Geely also took a 1.4-billion-kronor restructuring charge, having announced 3,000 job cuts in May. The group had booked a net profit of 5.7 billion kronor in the same quarter last year. Excluding exceptional items, it estimated its quarterly operating profit at 2.9 billion kronor, down from 8.0 billion last year. Retail sales of cars dropped by 12 percent by volume, while revenue fell by eight percent to 93.5 billion kronor due to lower volumes and the higher value of the Swedish kronor. That beat the analyst consensus of 88.2 billion kronor compiled by Bloomberg. Shares in Volvo Cars shot more than seven percent higher as trading got underway on the Stockholm stock exchange. Volvo Cars announced in April an 18-billion-kronor cost-cutting plan, part of efforts to navigate a car market buffeted by US tariffs and a costly switch to electric vehicles. It said then it would adapt to the increasing regionalisation in trade. And on Wednesday it announced it would begin building its XC60 SUV in the United States next year to avoid the 25-percent US tariffs applied to its vehicles. The company said it would no longer provide financial guidance for 2025 and 2026 due to 'external developments and increased uncertainties'.

Volvo Cars swings into loss on EVs, tariffs
Volvo Cars swings into loss on EVs, tariffs

Bangkok Post

time3 days ago

  • Automotive
  • Bangkok Post

Volvo Cars swings into loss on EVs, tariffs

STOCKHOLM - Volvo Cars announced on Thursday it had swung into loss in the second quarter, after it took an impairment charge for its electric cars, booked restructuring charges and dealt with a slower, tariff-troubled market. The net loss of 8.1 billion kronor ($830 million) was due to a 11.4-billion-kronor writedown in the value of its EX90 electric SUV and ES90 electric sedan due to production delays, higher development costs than planned and now US tariffs making sales there unprofitable. "Demand remains under pressure from the macroeconomic environment, tariff-related uncertainties and tougher competition," chief executive Hakan Samuelsson said in the quarterly earnings report. The Sweden-based manufacturer owned by China's Geely also took a 1.4-billion-kronor restructuring charge, having announced 3,000 job cuts in May. The group had booked a net profit of 5.7 billion kronor in the same quarter last year. Excluding exceptional items, it estimated its quarterly operating profit at 2.9 billion kronor, down from 8.0 billion last year. Retail sales of cars dropped by 12 percent by volume, while revenue fell by eight percent to 93.5 billion kronor due to lower volumes and the higher value of the Swedish kronor. That beat the analyst consensus of 88.2 billion kronor compiled by Bloomberg. Shares in Volvo Cars shot more than seven percent higher as trading got underway on the Stockholm stock exchange. Volvo Cars announced in April an 18-billion-kronor cost-cutting plan, part of efforts to navigate a car market buffeted by US tariffs and a costly switch to electric vehicles. It said then it would adapt to the increasing regionalisation in trade. And on Wednesday it announced it would begin building its XC60 SUV in the United States next year to avoid the 25-percent US tariffs applied to its vehicles. The company said it would no longer provide financial guidance for 2025 and 2026 due to "external developments and increased uncertainties".

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