Volvo Cars pulls sales guidance on Chinese outlook and slow US rebound
The carmaker has been affected by tariffs, weaker electric vehicle demand and high development costs
Swedish automaker Volvo Cars has adjusted its sales forecasts for China and the United States due to unfavorable market conditions, the company announced on Friday (Oct 2). The decrease in guidance stems from challenges faced by the industry and the company itself. Volvo Cars, majority-owned by Geely Holding, cited tariffs, weak demand for electric vehicles, and high development costs as factors contributing to the lower than anticipated sales.
The company did not provide new sales guidance, but analysts noted that it was expected given the stiff market challenges. Volvo Cars' shares fell by 3 per cent at 0800 GMT, slipping as low as 14.60 kronor per share, marking a 50 per cent decline in value this year. The company's recent third-quarter performance reflected an 11 per cent dip in sales compared to the previous year.
Volvo Cars reported selling 141,609 cars in the third quarter, highlighting the ongoing difficulties in China's market, which showed no signs of recovery. The slowdown in the premium vehicle segment of the US market was also slower than expected. Earlier this year, Volvo Cars had set more optimistic sales targets for the second half of 2023, with hopes for a strong positive cash flow towards the end of the year.
However, the current outlook is far from the original guidance due to the deteriorating market conditions, particularly in China, and a sluggish recovery in the US market.
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