Volvo Cars books $1 billion impairment charge
Volvo Cars
is booking a
impairment charge
of 11.4 billion crowns ($1.2 billion) in the second quarter related to its
ES90
and upcoming
EX90
models, due to
tariffs
and
launch delays
, it said on Monday.
The group, which is controlled by China's
Geely Holding
, said it is currently unable to sell its
Volvo
ES90, which is built in China, profitably in the United States due to import tariffs, while profit margins for the same model are also under pressure in Europe for the same reason.
"The charge primarily reflects adjustments in expected volumes and planned lifecycle profitability associated with the platform for the EX90 and ES90 cars," it said in a statement.
The impairment charge also reflects significant launch delays in the past and subsequent additional development costs, it said.
Volvo Cars, which is due to publish second-quarter results on July 17, said the effect on net income in the period will be 9.0 billion crowns.
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