Volvo Car walks back sales target on weaker demand

GOTHENBURG: Volvo Car AB lowered its expectations for retail sales this year due to a growing weakness in the automotive market.

The manufacturer will focus on protecting margins instead of pushing volumes and therefore sees unit sales growing at as much as 8% this year, from an earlier forecast of as much as 15%, it said Wednesday.

"Industry demand continues to soften and is now affecting the premium segment,” Volvo said in a statement.

The Geely-owned brand already scaled back its profit outlook last month, citing an uncertain global economy and increased tariffs on electric vehicles built in China, where it has some production. Volkswagen, Stellantis, Aston Martin, Mercedes-Benz and BMW have all lowered their earnings expectations in recent weeks.

In September, the Swedish-origin company also joined a growing roster of manufacturers walking back EV ambitions, abandoning a target to sell only fully electric cars by the end of the decade.

The maker of the electric EX90 and EX30 sport utility vehicles said it might need to keep some hybrid models in its portfolio amid the slowing market for battery cars.

Volvo’s third-quarter operating profit beat expectations on robust demand for its models with a battery. Retail sales rose 3% in the period, to 172,849 cars, with fully electric and plug-in hybrid vehicles accounting for 48% of the total.

Volvo said it was disciplined on pricing in China, resulting in lower sales volumes in the world’s biggest auto market.

"The company’s internal cost efficiency initiative has already resulted in lower variable costs and remains a crucial focus area, and actions in this area will be accelerated,” Volvo said.