Mikael Sjoberg | Bloomberg | Getty Pictures
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 12 months.
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 12 months.
Its margin on earnings earlier than curiosity and taxes (EBIT) narrowed to 2.3% from 5% a 12 months 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 replicate 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 business turbulence.
Volvo Automobiles stated its so-called “value and money motion plan” would come with reductions in investments and redundancies at its operations throughout the globe. The corporate didn’t present additional data on the potential scale of the layoffs however stated it will replace with “extra particulars as quickly as doable.”
Volvo Automobiles stated it’s now not offering monetary steerage for each 2025 and 2026.
“There’s a reasonably heavy headwind in the marketplace, Volvo Automobiles CEO Håkan Samuelsson advised CNBC’s “Europe Early Version” in a Tuesday interview.
“There’s a quantity drop, and on high of that additionally value competitors, new gamers within the electrical section, particularly these influencing costs typically. And on high of that you’ve the turbulence now with further tariffs, so all of that makes it very tough to foretell the longer term.”
Samuelsson added that the corporate was specializing in what it may well 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 will sharpen its U.S. product line-up to concentrate on development and discover the way it may “higher use” its present manufacturing footprint within the coming years, so as to produce “extra automobiles the place they’re offered.”
U.S. President Donald Trump imposed 25% tariffs on automobiles imported to the U.S. earlier this month. The White Home has stated it additionally plans to put tariffs on some auto components equivalent to engines and transmissions, that are set to take impact no later than Might 3.
Volvo Automobiles’ gross sales share of “electrified automobiles,” which it defines as any automobile with a charging wire, hit 43% within the first quarter. It goals for the class to characterize 90% to 100% of its world gross sales quantity by 2030.
