Volvo Cars shares plunged up to 30% to a record low after the Swedish carmaker reported a third-quarter net loss of SKr5.7bn ($575mn), a sharp turn from a SKr4.5bn profit a year prior. The decline was driven by collapsing sales in China, where revenue fell nearly 50%, forcing the company to cut an additional 2,500 jobs and SKr5bn in costs. The Geely-owned carmaker had already withdrawn annual guidance and issued a profit warning earlier in the month.
Revenue declined 23% year-on-year to SKr66.9bn, with a cash outflow of almost SKr9bn. Chief Executive Håkan Samuelsson warned the China market has "not reached the bottom" and said the group is rolling out locally produced cars with Chinese software to improve competitiveness. Klaus Zellmer, the former Škoda chief, is set to replace Samuelsson as CEO by October next year.
Bernstein analyst Harry Martin noted the new CEO has "an even harder job" amid a deep industry decline. Western rivals including Volkswagen, Porsche, BMW and Jaguar Land Rover are also cutting workforces due to competition from Chinese EVs, US tariffs and raw material costs.
Source: Financial Times Companies · Summarized by HeadlinesBriefing