Stockholm, July 18, 2024 (Reuters) – Swedish automaker Volvo Cars reported a record operating profit in the second quarter, beating analyst expectations. However, the company also lowered its full-year sales outlook in response to the European Union’s decision to impose steep import tariffs on Chinese-made cars.
Key takeaways:
- Record operating profit: Volvo Cars reported an operating profit (EBIT) of 8.2 billion Swedish kronor (€712.52 million) in the second quarter, the highest ever for a single quarter and up 28% from the same period last year.
- Beat analyst expectations: Analysts had expected EBIT of 6.7 billion kronor.
- Lowered full-year sales outlook: Volvo Cars now expects full-year sales to grow by 12-15%, down from its previous forecast of 15%.
- Reason for downgrade: The EU’s imposition of import tariffs on Chinese cars.
- Declining demand for electric vehicles in the EU: The tariffs are expected to further dampen demand for EVs, which is already on the decline.
- Volvo Cars still expects sales growth: The company still expects sales to grow, but at a slower pace than previously anticipated.
CEO’s comment:
“We continue to see growth ahead, but we also see some challenges,” Volvo Cars CEO Jim Rowan told Reuters. “The tariffs are one of them,” he added, but said he was confident that the issue could be resolved and that the company could achieve its original sales growth target.
Sources:
- Volvo Cars: https://www.volvogroup.com/en/investors.html
