Mikael Sjoberg | Bloomberg | Getty Pictures
Swedish-based automaker Volvo Automobiles on Tuesday introduced cost-cutting plans of 18 billion Swedish krona ($1.87 billion) and withdrew monetary steerage as its working revenue fell sharply within the first three months of the yr.
Volvo Automobiles, which is owned by China’s Geely Holding, reported first-quarter working revenue of 1.9 billion krona, down from 4.7 billion krona in the identical interval final yr.
Its margin on earnings earlier than curiosity and taxes (EBIT) narrowed to 2.3% from 5% a yr earlier, whereas income fell to 82.9 billion krona within the first quarter, down from 93.9 billion krona in the identical interval of 2024.
The corporate mentioned the outcomes mirror a drop in wholesales as a part of a deliberate stock discount through the closing three months of 2024, antagonistic foreign money results and broader automotive trade turbulence.
Volvo Automobiles mentioned its so-called “value and money motion plan” would come with reductions in investments and redundancies at its operations throughout the globe. The corporate didn’t present additional data on the potential scale of the layoffs however mentioned it will replace with “extra particulars as quickly as potential.”
Volvo Automobiles mentioned it’s now not offering monetary steerage for each 2025 and 2026, citing tariff stress on the automotive sector.
“There’s a quite heavy headwind in the marketplace,” Volvo Automobiles CEO Håkan Samuelsson instructed CNBC’s “Europe Early Version” in a Tuesday interview.
“There’s a quantity drop, and on high of that additionally worth competitors, new gamers within the electrical phase, particularly, but additionally influencing the costs usually. And on high of that you’ve got the turbulence now with further tariffs, so all of that makes it very troublesome to foretell the long run.”
Samuelsson added that the corporate was specializing in what it may management through the fee motion package deal.
Shares of Volvo Automobiles fell as a lot as 10% on Tuesday, earlier than paring a few of its losses. The agency was final seen buying and selling 8.1% decrease at round 1:50 p.m. London time.
Volvo Automobiles CEO requires a U.S. commerce deal
In its earnings report, the corporate mentioned it will sharpen its U.S. product line-up to concentrate on progress and discover the way it might “higher use” its current manufacturing footprint within the coming years, in an effort to produce “extra vehicles the place they’re offered.”
U.S. President Donald Trump imposed 25% tariffs on vehicles imported to the U.S. earlier this month. The White Home has mentioned it additionally plans to position tariffs on some auto components resembling engines and transmissions, that are set to take impact no later than Could 3.
“We see long-term, we’d like, after all, to return again to some form of commerce cope with the U.S. In any other case, that is after all going to be very troublesome for the enterprise within the U.S.,” Samuelsson mentioned.
Alongside making extra vehicles regionally, Samuelsson mentioned the automaker is exploring the way it can utitilize its South Carolina manufacturing unit extra successfully.
“We’re wanting into using our Charleston manufacturing unit higher. So, we’d like one other automotive into that manufacturing unit and that needs to be a best-seller for the U.S. market. It is one thing that we in any other case must import and pay tariffs for. So, that is actually the countermeasures we’re taking,” Samuelsson mentioned.
Volvo Automobiles’ gross sales share of “electrified vehicles,” which it defines as any automobile with a charging twine, hit 43% within the first quarter. It goals for the class to characterize 90% to 100% of its world gross sales quantity by 2030.
