For 2013, Volvo Cars seeks to break even on an operating level without getting a boost from one-off gains that made the automaker profitable in 2012. The operating profit of Volvo last year declined to 18 million Swedish crowns ($2.76 million). This is a significant drop from having posted a 2.0 billion crowns profit the prior year.
For the year, Volvo reported a net loss of 480 million crowns, compared with a profit of 1 billion crowns in 2011. Last year, Volvo was able to stay profitable at an operating level because of the sale of Volvo technology to parent Zhejiang Geely Holding Group Co. At last Friday’s news conference, Volvo CEO Hakan Samuelsson said that the company hopes to be able to break even on an operative basis by having enough car sales.
Volvo said that the markets in China and the U.S. will expand in 2013. However, it continues to be wary about the European demand, representing its largest market. Volvo said further that it’s believed that the auto market in Europe will still be affected by the “challenging economic environment.” Volvo said that it may take a year or two before it can break even on a net level.
To stay secure in the auto industry, Volvo aims to reduce costs as well as develop new car models. Last year, Volvo terminated hundreds of temporary production workers. Last February, Volvo announced plans to eliminate a thousand additional jobs on the consultant and white-collar segments.
For the full year, Volvo’s sales were 124.5 billion crowns against 125.7 billion the former year. Sales declined in Europe and China but there was a slight increase noted in the U.S. Volvo has hoped to achieve quick growth in China and to hit sales of 800,000 cars by 2020; however, it has progressed very slowly so far.