VOLVO Cars, the premium carmaker, has reported a strong 27.7 percent increase in operating profit in 2017, earning a record SEK14.1 billion ($1.746 billion) compared to SEK11.0 billion ($1.367 billion) in 2016, driven by global sales of 571,577 cars.
Net revenue for the period increased 16.6 percent to SEK210.9 billion ($26.18 billion) compared to SEK180.9 billion ($22.46 billion) in 2016, while the operating profit margin improved from 6.1 percent in 2016 to 6.7 percent in 2017.
The results underline the comprehensive transformation of Volvo’s finances and operations in recent years, positioning the company for its next growth phase.
Global sales rose 7.0 percent during the year, underpinned by a 25.8 percent increase in China, Volvo Cars’ largest individual market.
For Middle Eastern markets, despite sales across all manufacturers in the premium segment dropping by 12%, Volvo Cars has retained its position with 1,196 units sold across the region.
The XC60 became Volvo Cars’ main brand driver and best-selling model followed by XC90. These two models represented 63% of Volvo Cars sales The XC60 will continue to be the primary force driving Volvo Cars’ brand momentum in the SUV segment, while the S90 saloon & V90 estate will anchor Volvo’s position in the premium D segment.
With order numbers from Europe and the Asia-Pacific region indicating that the XC40 is very well received, its arrival in the Middle East is expected to further boost Volvo Cars’ sales in the region. Traditionally a market with a strong appetite for the premium compact and premium SUV segments, “the XC40, our first ever small premium SUV completes our global SUV line-up and takes the brand into a new, exciting direction. It will broaden our brand’s appeal to include a completely new set of potential customers, especially within the Middle East”, says Jesus Fernandez de Mesa, Managing Director of Importers EMEA.
“Our business has transformed completely since 2010 and we are now gearing up for a phase of global, sustainable growth,” said Håkan Samuelsson, president and chief executive. “We are investing in all parts of our organization and have laid out clear strategies around electrification, autonomous drive and connectivity.”
Full details of the company’s financial results are available by following this link and will be discussed further at a press conference starting at 10:00am CET, which can be followed via this link. — SG
2017 was an important year for Volvo Cars, as the company launched new models, developed partnerships in important areas and unveiled a global electrification strategy unmatched by any other car maker.
It completed its global line-up of brand new SUVs throughout the year, with the launch of the new XC60 and the company’s first ever small SUV, the XC40. The XC40 launch also coincided with the introduction of a new model of car access via the company’s brand new ‘Care by Volvo’ premium subscription service.
In July, Volvo Cars announced that it would place electrification at the core of its future business, stating that every car it launches from 2019 will have an electric motor. In a further commitment to electrification it launched Polestar, a new stand-alone electrified car brand fully consolidated within the Volvo Car Group.
Volvo Cars enhanced its collaboration with Geely Holding via the creation of a joint venture technology company to provide further economies of scale in technology development. It also acquired a 30 percent stake in Geely’s new LYNK & CO car brand, with which it shares the Compact Modular Architecture (CMA).
In 2017, Volvo Cars signed a framework agreement with ride-hailing company Uber to sell it tens of thousands of autonomous driving compatible base cars between 2019 and 2021.
Volvo Cars announced in 2017 it will open its new manufacturing plant in South Carolina, its first in the United States, which will build the upcoming new S60 mid-sized sedan as well as the next generation XC90 large SUV. The plant represents an investment of over $1.1 billion and will create nearly 4,000 new jobs. — SG
