CHINESE-OWNED Volvo Car Group yesterday raised its outlook for 2014 sales after returning to profit in the first half as strong growth in China and a moderate upturn in Europe more than offset lingering weakness in the United States.
Gothenburg-based Volvo, one of Sweden’s top exporters and employers though a small player in the global auto industry, saw demand gain traction during the end of last year and yesterday’s figures showed momentum had carried into 2014.
After a 9 percent rise in sales for the first seven months of 2014, Chief Executive Hakan Samuelsson said he saw sales growing “close to 10 percent” this year compared with a previous forecast of “a good 5 percent.”
Bought by Zhejiang Geely Holding Group Co from Ford Motor Co in 2010, Volvo has ambitious sales goals aimed at helping fund investment needed to take on larger rivals.
“We came in at nearly 10 percent in the first half and for the full year we expect growth to continue at that level,” Samuelsson said, pointing to continued expansion in China.
“We will continue to grow faster than the market (in China) if at a slightly slower pace. We expect to have a volume of a bit more than 80,000 cars in China this year,” he said.
Lifted by China as well as recovering volumes in Europe, Volvo reported operating earnings of 1.21 billion crowns (US$176.5 million) for the first half of the year versus a loss of 577 million crowns a year earlier.
Its revenues climbed 15 percent to 64.8 billion crowns.
The company aims to nearly double annual sales to 800,000 cars by 2020 and make inroads in a premium market dominated by rivals such as Daimler’s Mercedes-Benz and BMW.
Volvo this month is launching its XC90 SUV, the first fully new car developed under its Chinese ownership, and has said it plans to price its new premium cars at the same level as those of its German competitors.
While its Chinese business is taking off, a lack of new models has seen Volvo’s US sales fall to roughly half of what they were a decade ago, totaling only 61,233 cars last year.