Volvo Cars will cut about 2,500 jobs, around 2,000 of them in Sweden, after swinging to a loss in the third quarter as sales collapsed in China and tariffs bit in the United States. Its shares fell more than 20 per cent in Stockholm on Friday, 23 October.
The Gothenburg-based carmaker, controlled by China's Geely, reported an underlying operating loss of SEK3.7bn, a margin of minus 5.6 per cent, compared with a profit of SEK5.8bn a year earlier. Including one-off items, the operating loss was SEK5.6bn. Revenue fell to SEK66.9bn from SEK86.4bn, about 10 per cent below analysts' forecasts, and free cash flow was negative SEK8.9bn.
China and the US
Revenue in China fell by almost 50 per cent as new Chinese rivals cut prices. In the US, tariffs and the removal of incentives for electrified cars continued to squeeze margins. Wholesale volumes fell 19 per cent year on year, which analysts at Jefferies called "the main surprise".
The results also included a SEK1.1bn charge from revaluing emissions credits after changes to US rules.
Deeper cuts
The job cuts will come through ending consultancy contracts, natural attrition and targeted exit packages. Volvo is also cutting a further SEK5bn from indirect and variable costs, aiming for indirect spending almost 25 per cent below 2024 levels by the end of 2027.
There were brighter spots. Fully electric cars made up 32 per cent of sales, up from 22 per cent, and the new EX60 has more than 50,000 orders in Europe, though production is ramping up more slowly than planned.
