Mikael Sjoberg | Bloomberg | Getty Photographs
Swedish-based automaker Volvo Vehicles 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 Vehicles, 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 in the course of the closing three months of 2024, opposed forex results and broader automotive business turbulence.
Volvo Vehicles 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 data on the potential scale of the layoffs however stated it will replace with “extra particulars as quickly as attainable.”
Volvo Vehicles stated it’s now not offering monetary steerage for each 2025 and 2026.
“There’s a moderately heavy headwind in the marketplace, Volvo Vehicles CEO Håkan Samuelsson informed CNBC’s “Europe Early Version” in a Tuesday interview.
“There’s a quantity drop, and on prime of that additionally worth competitors, new gamers within the electrical section, particularly these influencing costs usually. And on prime of that you’ve 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 could actually management through the fee motion package deal.
Shares of Volvo Vehicles 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 might “higher use” its current manufacturing footprint within the coming years, as a way 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 comparable to engines and transmissions, that are set to take impact no later than Could 3.
Volvo Vehicles’ gross sales share of “electrified automobiles,” which it defines as any car with a charging twine, hit 43% within the first quarter. It goals for the class to symbolize 90% to 100% of its world gross sales quantity by 2030.