Volvo Cars reports profit, record growth in China
Published on August 18, 2011 by Tycho de Feijter
China-owned but Gothenburg-based Volvo Cars Corporation reported an operating earning before interest and taxes of 600 million kronor ($93 million), 170 million kronor in the second quarter more than that of 2010, a statement from Volvo Cars said on Wednesday.
“We are gradually returning to sustainable profitability although we have more work to do before we reach our objectives. A good sales increase is evident in many markets as we are working to revitalize the Volvo brand to attract more customers,” said Stefan Jacoby, President and CEO of Volvo Car Corporation.
In the first six months of 2011, Volvo Car Corporation has delivered an operating profit of 1.2 billion kronor with a sale of 230,746 vehicles, an increase of 20.3 percent compared to 2010.
Retail sales in the second quarter increased by 26.6 percent to 123,919 units, compared with 97,884 units in 2010.
Growth was recorded in all sales regions, with China demonstrating the largest increase with 62.1 percent. North America grew by 43.0 percent, Nordic region by 17.7 percent, Europe by 15.5 percent and the overseas region by 41.6 percent compared to the same period in 2010. Market share improved in all regions compared to previous year, the statement said.
Improved sales are mainly driven by strong demand for the all new S60 and V60 together with the Volvo XC60 crossover with sales improving month by month.
Volvo Car Corporation’s commitment to reducing the CO2 footprint from its product range continues to be appreciated by the customers with the Volvo DRIVE range representing 19.2 percent of sales in Europe, the statement said.
“Overall, the performance in the first six months provides great confidence. However, the current unstable economic climate is likely to result in additional volatility both regarding consumer confidence as well as exchange rates and raw material prices that may in turn impact profits,” said Jacoby cautiously.
Additionally, reduced production capacity during the vacation period may also impact business result in the third quarter.