Volvo Cars plunges 27% as CEO says China sales slump came 'faster than we thought'
Volvo Cars shares dropped about 27% on Friday after the Swedish automaker reported a third-quarter operating loss of 5.6 billion kronor (about $564 million), compared with a 6.4 billion kronor operating profit in the previous period.
The Geely-owned company blamed tougher conditions in China and the U.S. Its China revenue fell almost 50% from a year earlier as premium brands faced "hypercompetition" from new Chinese rivals. In the U.S., it cited tariffs and fewer incentives for electric-car buyers.
CEO Håkan Samuelsson told CNBC the change in China came "faster than we thought" and that selling global cars there will no longer work. He said Volvo needs a more regional strategy with regionally adapted cars, shared platforms with Geely, and key software developed in China.
Volvo Cars plans to cut 5 billion kronor in costs and eliminate 2,500 jobs worldwide, 2,000 of them in Sweden, as part of a leaner central administration.
Key points
- Shares down about 27%
- Q3 operating loss: SEK 5.6 billion
- 2,500 job cuts, 2,000 in Sweden
Summary written by Readthrough from the original article. The full story, with photos and any updates, is at CNBC.
