Mikael Sjoberg | Bloomberg | Getty Photographs
Swedish-based automaker Volvo Automobiles on Tuesday introduced cost-cutting plans of 18 billion Swedish krona ($1.87 billion) 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 stated the outcomes mirror a drop in wholesales as a part of a deliberate stock discount through the remaining three months of 2024, opposed foreign money results and broader automotive trade turbulence.
Volvo Automobiles stated its so-called “price and money motion plan” would come with reductions in investments and redundancies at its operations throughout the globe. The corporate didn’t present additional info on the potential scale of the layoffs however stated it might replace with “extra particulars as quickly as attainable.”
Volvo Automobiles stated it’s not offering monetary steerage for each 2025 and 2026.
“There’s a slightly 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 prime of that additionally value competitors, new gamers within the electrical phase, particularly these influencing costs typically. And on prime 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 might probably management by way of the price motion package deal.
Shares of Volvo Automobiles fell as a lot as 10% at 8:17 a.m. London time.
In its earnings report, the corporate stated it might sharpen its U.S. product line-up to concentrate on development and discover the way it may “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 stated it additionally plans to put tariffs on some auto elements corresponding to engines and transmissions, that are set to take impact no later than Could 3.
Volvo Automobiles’ gross sales share of “electrified vehicles,” which it defines as any car with a charging twine, hit 43% within the first quarter. It goals for the class to signify 90% to 100% of its international gross sales quantity by 2030.
