Volvo Cars Posts Declining Operating Profit, Anticipates Challenges in 2023
STOCKHOLM, Feb 2 (Reuters) - Swedish automaker Volvo Cars reported a decline in fourth-quarter operating profit, citing challenging market conditions and intensified competition.
The company, owned by China's Geely, expects market growth to slow compared to previous years. CEO Jim Rowan acknowledged the difficulties in maintaining the volumes and profitability levels achieved in 2024, particularly due to expected price cuts across the sector.
Despite the challenges, Volvo Cars maintained its forecast for a core operating profit margin of 7-8%. Operating profit for the fourth quarter reached 3.9 billion Swedish crowns ($357 million), compared to 5.4 billion a year earlier. Excluding joint ventures, operating profit was 6.3 billion crowns, down from 6.7 billion.
The automotive industry faces headwinds from weakening demand for electric vehicles due to the lack of affordable options and slow infrastructure development. Additionally, manufacturers anticipate the impact of tariffs imposed by the European Union and the United States on electric vehicles imported from China.
($1 = 10.9245 Swedish crowns)