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.

Why Volvo remains optimistic despite huge losses
Håkan Samuelsson, CEO of Volvo Cars. Photo: Adam Ihse/TT

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.

Member comments

  1. Hybrid plug-in combine the best of combustion engines and electrical cars. If used together with E85 is most enviromental friendly that electrical pure vehicles because use less lithio in the battery and don’t have the risk to the energy besupplied by coal.

  2. If ALL the cars be pure electric Will be necessary to the contries produce energy by coal and nuclear energy.

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