Volvo to post huge operating loss in China for 2012

Article by Anita Panait, on April 18, 2013

Volvo Car Corp. is expected to report a huge operating loss in China for 2012 due to weak sales as well as an expensive new plant, according to report by Swedish daily Svenska Dagbladet citing sources. The daily reported that Volvo will post operating losses of between SEK2 billion to SEK4 billion ($308 million to $615 million) in China.

The paper reported that Volvo’s operating earnings in China was heavily hit by the high costs connected to its nearly finished new plant in the Chengdu, China. The carmaker’s operating losses are also attributed to expenses connected to its building up a network of Chinese dealers as well as weak overall sales in the country.

The carmaker’s operating losses in China are highly expected as Volvo succumbed to an 11-percent drop in sales in 2012 and it has been investing heavily to establish its first local production in the country. Volvo has been busy implementing cost reductions and job cuts as it continues to suffer from the current economic crisis in Europe.

In the first half of 2012, Volvo posted SEK239 million ($35.6 million) in earnings before interest and tax, a deep plunge from the SEK1.53 billion operating profit in the same period in 2011. Volvo posted SEK254 million in net losses in the first half of 2012. Volvo has been wholly owned by China's Zhejiang Geely Holding Group Co. since 2010.

Topics: volvo, china, loss

If you liked the article, share on:

Pin It

Comments

Recommended

Tesla marked a major milestone as it surpassed Ford in market capitalization. Automaker Tesla, formerly known as Tesla Motors, closed out the trading on March 27, 2017, with a market...
by - March 30, 2017
The mid-cycle facelift for the Mercedes-Benz's S-Class have been disclosed to the public eye via these leaked shots. The images that recently surfaced and others like it were published online...
by - March 30, 2017
Reddit user Jdubbswrx spotted a rather deceptive move coming from the German automotive manufacturer Audi. He posted an image of the supposed exhaust of the new 2018 Audi SQ5 sporting...
by - March 29, 2017
McLaren car owners will be thanking the automotive company as it has decided to roll out new goodies for the 540C, 570S and 570GT sports car line-up. From this series...
by - March 29, 2017
On July 11, Audi is set to reveal its flagship luxury sedan, the all new A8. And at this moment, none of us are sure how this model will look....
by - March 29, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries