More profit despite lower revenue
Volvo is benefiting from the implemented comprehensive cost-saving program earlier than planned. As a result, the company made more profit last quarter, despite a further decline in revenue. Volvo, owned by Chinese Zhejiang Geely, has been hit hard in recent months mainly by US import duties and EU tariffs on electric cars from China.
The operating result for the past quarter came in at 6.4 billion Swedish krona (approximately 590 million euros), an improvement of 11 percent year-on-year. Both the number of cars sold and revenue decreased by 7 percent.
Volvo is working to reduce costs by 18 billion krona. “The action plan led to reductions in variable and indirect costs earlier than expected last quarter,” the company said.
Volvo is among the globally most vulnerable brands to import duties. There is also strong competition, particularly in the Chinese market.