Volvo boss: electrification key to post-coronavirus growth

Volvo boss Håkan Samuelsson believes that the firm’s heavy focus on electrification and connectivity will help it to achieve long-term growth, despite the pandemic hitting sales and revenue in the first half of 2020.

The Swedish manufacturer sold 269,962 cars worldwide between January and June 2020 – a 20.8% drop from the 340,826 sold in the same period last year. Volvo posted an operating loss of 989 million krona (£85.59m). Revenues fell by 14.1%.

While Volvo’s sales in Europe – where most countries introduced lockdown measures between March and June – fell by 29.5% to 123,198 units, there were encouraging signs from China.

While sales in that market were hit by lockdown measures in the first quarter, sales were up year-on-year in the last three months, and Volvo’s first half sales total of 65,741 units in the region was down just 3.0% year-on-year.

Sales in the US were down 13.7% in the first half but also rose year-on-year in June.

Another positive sign for Volvo has been the success of its plug-in hybrid models, with the 38,000 sold a 79.8% rise on the first half of 2019. They also account for nearly a quarter of all Volvo’s European sales.

With the recent launch of the XC40 T5 Recharge Plug-In Hybrid, the firm now offers a plug-in hybrid version of every model in its range, as part of a heavy focus on electrification through its new Recharge line.

Volvo is aiming for full electric vehicles to account for half of its sales by 2025, with the rest hybrids. The fully electric XC40 P8 Recharge will be launched later this year.

Samuelsson said the sales growth of Volvo’s plug-in hybrid models “demonstrates a strong trend towards our strategic ambition of being a company electrifying faster than rivals”.

He added: “The downturn we saw in the first half is a temporary one. We expect to see a strong recovery in the second half of the year, and our Recharge range of electrified cars puts us in a strong position to meet the emerging trends we’re seeing.

“This pandemic has strengthened our confidence that our strategic ambitions are the right ones and that an accelerated transformation of our business will lead to long-term growth. We will continue to focus on and invest in electrification, online sales and connectivity.”

Volvo’s first half sales figures also show the continued rise in popularity of its SUV models. The XC40, XC60 and XC90 accounted for 69% of all vehicles the firm sold, while the V estate range took 17% and the S saloon range 14%.

With the exception of its American facility in Charleston, South Carolina, all of Volvo’s production plants have now resumed production following various Covid-19 lockdowns. Due to the limited lockdown introduced by the Swedish government, the firm’s Torslanda plant lost only 15 days of production.