Car manufacturer Volvo Cars has, like the entire sector, been characterized by decreased demand. In connection with the year-end report, the company is now painting a continued bleak picture where the market, according to the company, will remain weak and not grow to the same extent as before.
The CFO points out declining demand, increased price pressure on the market, and tariff threats as some of the dark clouds on Volvo's car horizon.
We want to grow profitably and prioritize value over volume. But we are also part of a competitive global market, says Ekdahl.
2025 will be a transformative year where it will be difficult to reach the same levels as we did in 2024 in terms of both volumes and profitability.
Battery company weighs down
For the fourth quarter, Volvo Cars reported an operating profit of SEK 3.9 billion, far from market expectations of SEK 6 billion.
The result is, however, weighed down by a write-down of the battery company Novo Energy, where Volvo Cars has now taken over after the battery manufacturer Northvolt.
The operating margin of 3.4 percent was also far from expectations (an average of 5.75 percent).
Revenues, on the other hand, amounted to SEK 112 billion. Here, analysts had expected an average of SEK 108 billion, according to Bloomberg's compilation.
Despite sales falling in December, Volvo set a new global sales record with 763,389 cars sold during the full year 2024.
"Following developments"
With Donald Trump as president in the USA, the threat of tariffs has been actualized in recent times. Not least within the automotive sector, which has been pointed out as a major loser.
How such a scenario will affect Volvo Cars is, however, difficult to predict at present, claims Johan Ekdahl.
But we are naturally following developments closely and looking at different scenarios, he says.
The Volvo Cars share plummeted 11.1 percent on the Stockholm Stock Exchange after the report, to SEK 21.07. It is thus trading below the previous low level of SEK 21.85.
