Volvo targets return to profit in second half after coronavirus hit
Swedish car maker Volvo said that it expected its business to bounce back strongly in the second half of the year after falling to a 989m Swedish crown (£87m) loss for the first half.
Although the automaker was hit hard by the coronavirus pandemic, it said that it expected the downturn to be a temporary one.
“If the market recovers as we expect, we anticipate sales volumes to return to the levels we saw in the second half of 2019 and it is our ambition return to similar profit levels and cash flow”, the firm said in a statement.
Sales in the first six months fell 20.8 per cent as governments around the world placed lockdown restrictions on their citizens and closed vast swathes of the economy.
Volvo temporarily closed its manufacturing facilities and reduced work time with the through government programmes, but made a swift return to production.
In Europe, sales fell 29.5 per cent in the period, while across the Atlantic US sales fell 13.7 per cent year on year.
After falling in the first quarter of the year, sales in China returned to growth in the second three months to record only a three per cent drop over the entire period.
By contrast, the overall passenger car market in China declined by 26 per cent in first half, while the US and Europe fell by 24 percent and 38.1 percent respectively during the same period, suggesting that Volvo was performing far better than many of its rivals.
Chief executive Håkan Samuelsson said “The downturn we saw in the first half is a temporary one.
“We expect to see a strong recovery in the second half of the year and our Recharge range of electrified cars puts us in a strong position to meet the emerging trends we are seeing.”
Sales of its chargeable plug-in hybrids rose 79.8 per cent in the period, with Samuelsson saying that Volvo would continue to focus on expanding its electrification programme.
It also said that its planned merger with Chinese car giant Geely had been put on hold due to the latter’s plans to list in China.
Volvo has been owned by Geely since 2010, but has remained a separate firm up until now.
The company said the merger talks would resume in the autumn.