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Volvo Cars makes billion profit but CEO takes a cautious look ahead

Wednesday, 02 May 2012
The Chinese company Geely owned Swedish automaker,  Volvo reports a profit for 2011 of Skr1.636 billion before interest and tax. Sales rose 20.3 percent to 449 255 cars. Turnover was Skr125.5 billion.
Volvo Cars says in its press release that profitability was affected by increased costs for research and development and plant expansion. Particularly noticeable was the second half. Also foreign exchange and higher commodity prices pulled down the results.
CEO Stefan Jacoby says he is pleased when he looks back over the past year.
"Our sales situation is positive and we have started the journey towards creating a successful luxury brand, "he commented in the press release.
But Jacoby raises also a warning finger that Volvo performance is subjected to external factors. "We must continue to focus on implementing our plans to secure long-term profitability for the future, "he continues.
Sales grew in all markets and most of all in China. There, the increase was 54.4 percent compared to 2010.
Compared to 2010 last year sales rose while profits declined. 2010 was the year Volvo was bought by Geely and also returned to profit after years of crisis with billions of losses.
Revenues were then Skr113 billion, Skr12.5 billion less than 2011. The company went up by Skr2.3 billion in profits, Skr 700 000 more than last year.
Looking ahead, Volvo Cars is concern that the automobile market is affected by the financial turmoil, particularly in Europe were it forecast that the European market will decline. In the United States it is predicted that there would be a modest improvement. In China, the demand for luxury cars is set to increase.
By Team

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