Volvo Cars Reports Profit Dip, Forecasts Challenging 2025 Amid Market Turmoil
Sweden-based Volvo Cars announced a decline in fourth-quarter operating profit, attributing the drop to market challenges and predicting a turbulent 2025. The company, majority-owned by Geely of China, anticipates slower market growth and increased competition leading to price adjustments across the industry.
CEO Jim Rowan stated, "Given the market landscape, achieving previous volume and profitability levels will be demanding." Despite the decline, Volvo maintained its target core operating profit margin of 7-8%.
Q4 operating profit stood at 3.9 billion Swedish crowns ($357 million), down from 5.4 billion crowns in the same period last year. This result includes a 1.7 billion crown writedown related to the battery joint venture Novo Energy. Excluding joint ventures and associates, operating profit was 6.3 billion crowns, a decrease from 6.7 billion crowns.
Electric vehicle demand has waned due to a scarcity of affordable models and limited charging infrastructure rollout. Automakers also face potential impacts from European and American tariffs on Chinese-made electric vehicles.