Volvo Cars optimistic for 2021 after rebound in late 2020

STOCKHOLM: Swedish car maker Volvo Cars, owned by China's Geely, reported Thursday a drop in 2020 earnings but said it was optimistic for 2021 after a strong rebound in the second half last year.

China and the United States were the drivers of the turnaround, with both recording growth in sales for the year, despite the impact of the coronavirus pandemic.

"For 2021, we anticipate continued growth in sales volume and revenue, as we benefit from a strong product offering and further increases in online sales," CEO Hakan Samuelsson said, noting in particular the progress made with their line of electric cars.

"Assuming market conditions continue to normalise, this growth, as well as continued cost management are anticipated to improve profitability to pre-pandemic levels," Samuelsson said.

In 2020, revenue fell 4.0 percent to 262 billion Swedish kronor ($31 billion, 25.9 billion euros), and net profit dropped 19 percent to 9.6 billion kronor.

Volvo Cars sold 661,713 vehicles, down 6.0 percent, but in the second half of 2020 the company had a sales performance which was the "best in the company's history."

Then second half saw a 44 percent increase in sales, compared to the same period a year before, producing revenue of 151 billion kronor and a net profit of nine billion.

"China led the way, followed by the US, and in both markets... we managed to report sales growth for the full year. We also increased market share in most markets," Samuelsson said.

In Europe, which accounts for about a third of Volvo Cars' sales, the trend was less favourable, with drops of between 10 and 25 percent in many of its key markets, such as Sweden, Germany, the United Kingdom, Belgium, Italy and France.

Volvo said benefitted from the boom in online sales, boosted by the pandemic, which it also aims to develop.

Volvo Cars, which intends to move away from traditional internal combustion engines and wants to be exclusively electric by 2030, is currently investing in production capacity, notably in its Belgian factory in Ghent. It is also developing the high-end electric brand Polestar.

At the end of December, the company employed some 40,100 people, 1,300 fewer than a year earlier, and 3,300 temporary workers, a drop of 500.