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Reuters
4 days ago
- Automotive
- Reuters
Volvo Cars quarterly operating profit beats expectations despite tariff hit
STOCKHOLM, July 17 (Reuters) - Volvo Cars ( opens new tab reported a sharp decline in second-quarter operating profit on Thursday that nonetheless exceeded analyst expectations, sending shares up, though the company continues to face headwinds from tariffs and softening demand. Sweden-based Volvo Cars is the first European carmaker to release results in what analysts expect to be a challenging earnings season, as subdued demand for electric vehicles and intensifying competition from Chinese manufacturers coincide with trade tensions. But much of the fall had already been priced in to analyst and investor estimates as the prospect of tariffs and lower sales was largely expected. Shares were up nearly 8% at 0712 GMT. "Demand remains soft and volatile, impacted by weakening consumer confidence and the introduction of additional tariffs, which continue to pose challenges for the automotive sector," the carmaker said in its earnings report. In addition to a 27.5% tariff imposed on European-made Volvo cars entering the U.S., it has also been hit by a 25% tariff on auto parts as well as on steel and aluminium. Despite the gloomy environment, second-quarter numbers came in better than feared, analysts at Bernstein said in a research note. "Given how weak stock positioning is here it should be enough for a positive market reaction," they said. The company, owned by China's Geely Holding, posted an adjusted operating profit of 2.9 billion Swedish crowns ($297.89 million), down from 8.0 billion crowns a year earlier. Its gross margin, a key metric for assessing the tariff impact, dropped to 13.5% from 18.2% in the first quarter, though, adjusted for one-offs, it stood at 17.7%. Volvo Cars announced a $1.2 billion impairment charge related to model launch delays and tariffs on Monday, resulting in an operating loss of 10 billion crowns, compared to a profit of 8 billion crowns in the same quarter last year. Earlier in the year, former CEO Hakan Samuelsson was brought back for two years to help revive a record-low share price. Samuelsson quickly launched a cost-cutting programme, pulled earnings guidance, slashed 3,000 jobs, and slowed down investments. ($1 = 9.7352 Swedish crowns)
CNBC
4 days ago
- Automotive
- CNBC
Sweden's Volvo Cars switches gears in the U.S. as tariffs bite
Sweden-based automaker Volvo Cars plans to change tack in the U.S. as Washington's trade tariffs take their toll. Volvo Cars, which is owned by China's Geely Holding, on Thursday reported that second-quarter operating profit excluding items affecting comparability fell to 2.9 billion Swedish kronor ($297.83 million), down from 8 billion during the same time last year. Second-quarter revenue dropped to 93.5 billion kronor, compared to 101.5 billion kronor over the same period in 2024. Volvo Cars, which is widely considered as one of the most exposed European carmakers to U.S. tariffs, said the result reflects an ongoing challenging environment for the automotive industry. The company said it was also impacted by a previously announced one-off non-cash impairment charge of 11.4 billion kronor. The second-quarter earnings come shortly after Volvo Cars launched plans to add its best-selling XC60 sports utility vehicle to the production line of its U.S. car plant in Ridgeville outside Charleston in South Carolina. Production of the XC60, which has been the firm's best-selling model globally for years, is scheduled to start at the factory in late 2026. At the same time, Volvo Cars has started pulling sedans and station wagons from its U.S. portfolio amid waning interest, Reuters reported Thursday. It comes as U.S. tariffs of 27.5% on European-made cars and 100% on EVs imported from China have forced automakers to review their product strategies. Volvo Cars CEO Håkan Samuelsson said the company would "definitely not" pull out of the U.S. market, where it has been present for 70 years. "What we are doing is first of all, we want to fill our factory we have in South Carolina. It should be the strategic asset it was intended to be. So, we have to utilize it more," Samuelsson told CNBC's "Europe Early Edition" on Thursday. "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.
TimesLIVE
4 days ago
- Automotive
- TimesLIVE
Volvo will start building its XC60 in the US next year
Sweden's Volvo Cars said on Wednesday it would start producing its XC60 mid-size SUV in its plant in South Carolina in the US from late 2026. The shift highlights the carmaker's exposure to US President Donald Trump's car tariffs as it imports most of its hybrid and electric models from Europe. XC60 sales in the US rose by nearly 23% in the first six months of 2025, the Gothenburg-based company said, adding the model was most popular among US customers. Volvo Cars, owned by China's Geely Holding, said earlier this week it was booking an impairment charge of 11.4-billion crowns (R20,894,913,000) in the second quarter related to its ES90 and EX90 models due to tariffs and launch delays.
Wall Street Journal
4 days ago
- Automotive
- Wall Street Journal
Volvo Car Swings to Net Loss on Hit From Restructuring and Impairments Charges
STOCKHOLM—Volvo Car swung to a second-quarter net loss as the deteriorating global auto market saw it book hefty restructuring and impairment charges. The Swedish car maker—which is majority owned by China's Zhejiang Geely Holding Group—had already withdrawn guidance for this year and next as it grapples with growing market uncertainties that have seen lower volumes, increased price pressure and tariffs hitting profits.
Yahoo
4 days ago
- Automotive
- Yahoo
Volvo Cars pauses sales of some cars in US as tariffs pinch profits
By Marie Mannes STOCKHOLM (Reuters) -Volvo Cars said it has scaled back its U.S. model lineup this year, among the first examples of a major automaker halting U.S. shipments as President Donald Trump's tariffs make it harder to sell a broad range of vehicles profitably. The Swedish carmaker, which is owned by China's Geely Holding, told Reuters this week that it has been pulling sedans and station wagons from its U.S. portfolio as interest has waned. Volvo, which releases quarterly results on Thursday, is one of the most exposed automakers to rising tariffs as the majority of its vehicles are produced in Europe or China. Import duties on vehicles made outside of the United States that were imposed on April 1 have made market conditions more challenging for foreign sellers to the U.S. market. U.S. tariffs of 27.5% on European-made cars and over 100% on Chinese imports have forced automakers to rethink their product strategies, with Aston Martin limiting U.S. exports and Nissan suspending U.S. production of Canadian-bound cars. Industry experts have warned that automakers that cannot absorb the cost of border taxes themselves or pass it on to consumers will simply stop selling those models in the U.S. market. Other industries, such as apparel and toys, are experiencing similar effects. "If you're going to reduce sales to the U.S., then you'd want to eke more value out of the sales that you do," said Andy Leyland, co-founder of supply chain specialists SC Insight. Volvo Cars will now only sell around half of its 13-model global lineup in the U.S. market. Other than its V60 station wagon, it will exclusively sell SUVs in the country. That means that sedans will no longer be sold in the U.S. Production of the S60 at Volvo's South Carolina plant stopped last year, sales of the China-made S90 have been halted and Volvo said on Monday the new ES90 sedan cannot be sold profitably in the country. Globally, it is also dropping one of its last remaining station wagons, the V90, as demand declines. Volvo Cars told Reuters its European-made electric EX40 had also been temporarily halted, but it would resume sales "shortly". The company did not provide a reason. Even Volvo's ambitions for its flagship budget SUV, the EX30 - meant to be a big U.S. seller - have been curtailed. Volvo only offers the pricier dual-motor version at $46,195 to U.S. buyers rather than the cheaper single-motor version, with a promised sticker price of $35,000, similar to Tesla's Model 3. When faced with tariffs, carmakers tend to focus on selling high-margin models, but Andy Palmer, former CEO of Aston Martin, said such a strategy could have mixed results. "Some (customers) will either go to a different company" or be forced to buy a model "they didn't necessarily want or need," Palmer said. Bill Wallace, owner of Wallace Automotive Group that sells Volvos in Florida confirmed shoppers are quick to pick other brands. "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. Since 2022, Volvo has been hit by software bugs, supply chain snags, and tariff-related delays that slowed the rollout of its flagship electric EX30 and EX90. By the time deliveries began in 2024, EV demand had cooled, prices had spiked and new tariffs had kicked in. "Customers love them(Volvo), but they are just at the wrong place at the wrong time right now, Wallace said. Although it is produced at Volvo's U.S. factory in South Carolina, the high-end EX90 is hurt by tariffs because most of its components are European-made, which are now subject to 25% tariffs. The EX90 starts at $81,290 but struggled to gain traction with U.S. consumers, with less than 2,000 sold in the first half of 2025. Its South Carolina factory can make up to 150,000 of the cars annually. The company said on Wednesday it would add its popular SUV XC60 hybrid to the factory in 2026. ($1 = 9.7454 Swedish crowns) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
