Volvo Cars today reports a record revenue for the first six months of 2019 of SEK130.1 billion, up from SEK122.9 billion year-on-year and buoyed by the best first half-year sales performance in the company’s history.
For the first six months, sales amounted to a record 340,286 cars, a year-on-year increase of 7.3 per cent. During the period, Volvo Cars grew consistently faster than the overall market.
The company has gained market share across the US, China and Europe, with the UK and Germany recording growth of 30 per cent and 32 per cent respectively. The overall passenger car market in the US declined by 2.0 per cent in first half, while China and Europe fell by 9.3 percent and 3.1 percent respectively during the same period.
Håkan Samuelsson, president and chief executive, emphasised that the company has prioritised growth and market share during the period, capitalising on the building momentum for the Volvo brand generated by an all-new line-up of award-winning models.
“At a time when most markets in the world see stagnating car sales, we have had strong growth in the first half,” Mr Samuelsson said. “We continue to take market share in all regions where we operate, but increased pricing pressure and tariffs have decreased our operating profit. The cost measures we took earlier this year will come into effect in the second half of the year.”
Operating profit for the first half of 2019 was of SEK5.5 billion, compared with a SEK7.8 billion operating profit for the same period last year. For the second quarter of the year, operating profit fell to SEK2.6 billion, while revenue rose to SEK67.2 billion.
The first-half operating margin fell to 4.2 per cent from 6.4 per cent, while the operating margin for the second quarter of the year amounted to 3.9 per cent.
Volvo Cars has initiated additional cost measures within the company on top of already planned measures, which combined, aim to lower fixed costs by SEK2 billion. These actions will come into effect in the second half of the year and running into the first half of 2020.
For the remainder of the year, Volvo Cars expects continued growth in sales and revenue, boosted by continued strong demand for the fully renewed product portfolio as well as increased production capacity.
Market conditions are expected to put continued pressure on margins, but the combination of volume growth and cost measures is expected to result in a stengthened profit in the second half of the year compared with the same period last year.
The full financial report can be found on the Volvo Cars Investor Relations website.
The information was submitted for publication, through the agency of the contact person set out above, at 06.00 CET on 18 July 2019.
Note to editors
Market data sources
CPCA: China passenger car association
CICA: China import car association
Volvo Car Group in 2018
For the 2018 financial year, Volvo Car Group recorded an operating profit of 14,185 MSEK (14,061 MSEK in 2017). Revenue over the period amounted to 252,653 MSEK (208,646 MSEK). For the full year 2018, global sales reached a record 642,253 (571,577) cars, an increase of 12.4 per cent versus 2017. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected premium car brands in the world with sales of 642,253 cars in 2018 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding of China since 2010.
In 2018, Volvo Cars employed on average approximately 43,000 (39,500) full-time employees. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected into a number of business ambitions: by the middle of next decade it aims for half of its global sales to be fully electric cars and to offer half of all cars to customers via its subscription service. By then, it also expects one-third of its cars sold to be autonomous.