Volvo Cars shares fall 24% after third-quarter loss; carmaker to cut 2,500 jobs

Shares of Volvo Cars closed 24.2% lower in Stockholm on Friday 23 October after the Swedish carmaker reported a third-quarter operating loss and announced 2,500 job cuts, CNBC reported.

The company, which is owned by China’s Geely Holding, reported an operating loss of 5.6 billion Swedish kronor ($563.7 million), compared with an operating profit of 6.4 billion kronor in the previous period. It said “tougher” market conditions in China and the United States had “negatively affected free cash flow”.

Volvo Cars said its revenue in China fell almost 50% from a year earlier, as premium brands faced what it called “hypercompetition” from new Chinese rivals. In the United States, it cited the effects of tariffs and fewer incentives for buyers of electric cars, according to CNBC.

The company said it plans to cut costs by 5 billion kronor and eliminate 2,500 jobs worldwide, 2,000 of them in Sweden.

“It’s really a lot about the Chinese market, of course, where the change has come faster than we thought,” Chief Executive Håkan Samuelsson told CNBC. He said the company needed “a new strategy in China” with “regionally adapted cars”, and a “leaner central administration”.