Geely’s Volvo Car Group up­beat on 2017 after earn­ings jump

Global Times - Weekend - - AUTO - Reuters

Volvo Car Group re­ported a jump in 2016 earn­ings and rev­enue on Wed­nes­day and fore­cast higher sales this year helped by new mod­els de­vel­oped un­der Chi­nese owner Geely.

Op­er­at­ing earn­ings rose to 11.0 bil­lion Swedish crowns ($1.24 bil­lion) from 6.6 bil­lion a year ear­lier.

The com­pany was bought by China’s Zhe­jiang Geely Hold­ing Group Co from Ford Mo­tor Co in 2010.

It has in­vested in new mod­els and plants to se­cure a niche in the pre­mium auto mar­ket, which is dom­i­nated by Daim­ler’s Mercedes-Benz and BMW.

Gothen­burg-based Volvo re­ported record sales of 534,332 cars in 2016. One of Swe­den’s largest com­pa­nies by sales and num­ber of em­ploy­ees, Volvo has set an an­nual sales goal of 800,000 cars in the medium term.

That is seen as a suf­fi­cient level to en­sure its place in the mar­ket and to sus­tain fu­ture in­vest­ments.

“I fore­see that 2017 will also be a record year in terms of sales,” CEO Hakan Sa­muels­son said in a state­ment.

Sa­muels­son told Reuters he ex­pected prof­itabil­ity to stay at a “very strong level” this year as the au­tomaker con­tin­ued to re­place older mod­els with the likes of its new XC60 and XC40 SUVs.

“This year will be a year with heavy in­dus­trial trans­for­ma­tion,” Sa­muels­son said. “Two new cars will come out and at the end of the year we will, for the first time, have an all-modern lineup of SUVs.”

Global auto mar­kets, not least a Chi­nese pre­mium seg­ment where Volvo has made in­roads since Geely’s ac­qui­si­tion, are seen help­ing sales of a model lineup that has added the new XC90 SUV and 90-se­ries in re­cent years, he said.

Volvo also said it was look­ing to hire an ad­di­tional 700 to 800 em­ploy­ees at its Tors­landa plant in Gothen­burg in west­ern Swe­den.

Last year Volvo also took steps to­ward an even­tual list­ing, rais­ing 5 bil­lion crowns from Swedish in­sti­tu­tional in­vestors through the sale of newly is­sued pref­er­ence shares, though Sa­muels­son re­peated there were cur­rently no plans for an IPO.

“This is some­thing for the owner,” he said. “We are fo­cus­ing on im­prov­ing the per­for­mance of the com­pany and be­ing trans­par­ent in our re­port­ing.”

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