Volvo Cars' share recovers somewhat during Tuesday's trading after Monday's decline of 4 percent. Hampus Engellau says that the temporary price drop was small considering how large the write-down is in relation to Volvo Cars' market value.
It rather suggests that the share is very low-valued already based on the market's assessment of the company's challenges ahead.
Slow sales
Monday's write-down of 11.4 billion kronor is mainly attributed to the delay of EX90. According to Hampus Engellau, the one-time write-down creates conditions ahead for a different cost burden of the cars.
The main issue here is that since EX90 was so late, and sales are going very slowly, you get a shorter product life cycle for that car.
The vehicle manufacturer has already released delivery figures for the second quarter and Hampus Engellau will instead keep an eye on the forward-looking comments regarding how the operational business is going.
Good conditions
He believes at the same time that Volvo Cars has good conditions ahead as soon as trade agreements are in place, uncertainty decreases and the economy gets back on track in the European market.
Then you can always wish for peace in Ukraine because it would remove a lot of uncertainty in the market and recreate conditions for reconstruction and further growth in general in the economy.
Volvo Cars' share is, despite Tuesday's increase of 3 percent, still down over 22 percent this year.
