Home / ASSEMBLY PLANTS / Volvo Car Group reports 62% operating profit increase in Q3 2016
The new Volvo XC90

Volvo Car Group reports 62% operating profit increase in Q3 2016

New Volvo V90 location driving
New Volvo V90 location driving
New Volvo S90 location driving
New Volvo S90 location driving
Håkan Samuelsson - President & CEO, Volvo Car Group
Håkan Samuelsson – President & CEO, Volvo Car Group

 

 

With less than one more quarter to go in the year, indications have emerged that the Volvo Car Group may just be right on track for another record year in terms of sales even as the operating profit for the year is expected to improve substantially.

Already, Volvo Cars has reported third quarter operating profit of SEK2.067 bn (~R3.23 bn) compared to SEK1.276 bn (~R1.99 bn) in the same period last year, and a year-on-year increase in revenue to SEK41.1 bn (~R64.25 bn) from SEK36.1 bn (~R56.44 bn) previously. The company said the operating margin rose from 3.5 per cent in the third quarter of 2015 to 5 per cent in 2016.

Operating profit for the first nine months of the year, according to the company, was SEK7.66 bn (~R11.67 bn) compared to a full year operating profit for the whole of 2015 of SEK6.6 bn (~R10.32 bn), prompting Volvo Cars’ expectations for the full year to move from an “improvement” to a “substantial improvement” in profit compared to last year.

“With nine months of the year completed, I can state with confidence that Volvo Cars is on track for another record year in terms of sales and that operating profit for the year is expected to improve substantially,” president and chief executive, Håkan Samuelsson, said.

Volvo Cars attributed the strong third quarter performance to robust sales in major markets of both lifecycle models and new models. It listed the best-selling cars in the quarter as two lifecycle cars, the XC60 and V40, with sales of 38 000 and 23 000 respectively, closely followed by the new XC90 with sales of 22 000. It added sales of the XC90 hit 66, 000 for the first nine months of the year.

Overall, third quarter retail sales increased 7.8 per cent to 122 766 compared to the same period last year, with sales in China and the US both up over 20 per cent in the period.

At the same time as Volvo Cars is growing in terms of sales and profitability, it is also continuing to unveil an all new range of cars.

In the third quarter of 2016, it was possible for the first time for customers in Europe to purchase any of Volvo Cars’ top-of-the-range 90 series cars – of which the new S90 is the second model to reach South Africa early in 2017. There are good signs that the success of the XC90 is being followed by strong demand for the S90 sedan and V90 estate in global markets.

Another significant development in the third quarter was Volvo Cars’ move to entrench its position as a leader in autonomous driving by forging two important alliances.

The first was with Uber, the US online ride hailing company. Volvo Cars is the first car-maker to work with Uber to develop base cars to provide driverless ride hailing services.

“It is highly significant that of all the car companies in the world, Uber joined forces with Volvo Cars,” Samuelsson stressed.

The second is the establishment of a new joint venture company with Autoliv, the Swedish automotive safety technology company, to develop and sell software for autonomous driving cars.

“Volvo Cars will no longer be purely a car maker but increasingly a software developer responding to important technological changes in the automotive industry,” Samuelsson said.

 

Check Also

Nissan Navara Convoy Heads Off on Daring Adventure Into Africa

A convoy of Nissan Navara pick-ups, representing the entire range that is manufactured in South ...