Roll over Volvo: there’s a new Swedish car in town

Car developers in Gothenburg have given Volvo a new sibling.

Roll over Volvo: there’s a new Swedish car in town
Photo: Björn Olsson

Like Volvo Cars, the new brand Lynk & Co is owned by Chinese carmaker Geely but developed in Gothenburg. 

The new car, called Lynk & Co 01, is a sport utility vehicle built on the same platform as the new Volvo V40. 

It was created by Cevt, Geely and Volvo’s joint development company in Gothenburg. 

Lynk & Co’s cars will mostly be sold online and delivered to the buyer’s door. The vehicles will be assembled in China, with sales in the Asian country scheduled for next year, before the cars are rolled out in Europe and North America. 

Zhejiang Geely Holding bought Volvo Cars from Ford in 2010 as the first step in its bid to become a global automotive giant. The launch of the new brand is seen as another step along that path. 

Lynk & Co is designed to slip into the segment between Volvo and Geely cars. 

“You could basically say that Geely established itself at both ends of the car prestige scale. Volvo is seen as having a relatively high status. But people, not least Chinese people themselves, have an unfavourable view of Geely,” Mikael Wickengren, a car industry researcher at the University of Skövde told news agency TT. 

“Now they’re adding a brand in between, which is considered easier than trying to spruce up Geely.” 

In a separate move, Geely is putting pressure on the Swedish government to facilitate the development of a European head office, potentially in Gothenburg. 

“Our leadership met the Prime Minister recently but we haven’t seen any incentives yet,” Geely’s CEO Conghui An told Dagens Nyheter. 

Photo: Björn Olsson


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.