Volvo overcame a weak start to 2013 as weak sales in the United States to post SEK1.92 billion ($301.9 million) in operating profit in the year, thanks to one-off gains from the sale of technology to parent Zhejiang Geely Holding Group. Operating profit a year ago was SEK66 million.
The carmaker logged SEK577 million in losses in the first half of 2013. It also saw its drop to SEK122.25 billion in 2013 from SEK124.55 billion in 2012. "This strong turnaround from the first half of 2013 is further tangible proof of Volvo Car Group's progress in implementing its transformation plan," Volvo said in a statement.
The carmaker posted a 1.4-percent rise in global vehicle sales in 2013 to 427,840 units. Volvo is leaning on strong sales of locally built units in China to achieve a target of nearly doubling sales by 2020. In 2013, Volvo logged a 46-percent hike in sales in China to 61,146 units.
China has become a key market for Volvo as the carmaker try to take on larger luxury brands like BMW, Mercedes and Audi while producing enough volumes to meet the costs needed to invest in new vehicles. Volvo is expecting new models and a further expansion of its dealer network in China to underpin growth.
Volvo, however, suffered a 10-percent drop in sales in the US in 2013, apparently due to lack of new models. In response, the carmaker has replaced its top management in North America and is hoping that an overhaul of existing models and a launch of V60 sports wagon will revive sales in the US. Volvo is expecting its sales to grow by "a good" five percent in 2013.
“We are delivering on the plan we set out four years ago: focus on profitability, revitalise the brand, reinforce our product strengths and leverage our potential and position in China,” said President and CEO Håkan Samuelsson. “2013 was a year of groundwork for Volvo Cars, successfully preparing the way for the future. This year our total sales are forecast to increase and we will – with the XC90 – reveal the first product of a portfolio that will delight our customers, paving the way for the company’s future growth.” [source: Volvo]