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Volvo Deepens Cost-Cutting as Profits Plunge
Volvo Car Corp. reports higher unit sales and revenue in the second quarter, but tariffs and pricing pressure caused profits to plunge.
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Volvo Car Corp. reports higher unit sales and revenue in the second quarter, but tariffs and pricing pressure caused profits to plunge.
Unit sales in April-June rose 5% to 179,500 cars. Revenue advanced 2% to 67.2 billion kronor ($7.2 billion). But operating profit plummeted 38% to 2.6 billion kronor ($278 million), and net income dropped 54% to 1.4 billion kronor ($150 million).
Volvo says it is responding with new but unspecified measures which, combined with previously planned actions, will lower its fixed costs by 2 billion kronor ($214 million) by the middle of next year.
Through the first half of 2019, the company’s revenue grew 6% to 130 billion kronor ($13.9 billion). Unit sales rose 7% to 340,800 cars.
But operating profit in January-June fell 29% to 5.5 billion kronor ($588 million). Volvo’s operating margin shrank to 4.2% from 6.4%, including 3.9% in the second quarter.
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