Volvo logs SEK254 million net loss for first half of 2012

Article by Anita Panait, on September 7, 2012

Volvo posted SEK254 million in net losses for the first six months of 2012, in contrast to SEK1.21 billion in net profit for the first half of 2011. The Swedish carmaker’s earnings before interest and tax also dropped to SEK239 million ($35.63 million) in the first half of 2012 from SEK1.53 billion in the same period in 2011.

The carmaker blamed the net loss to lower sales volume in the review period, which dropped 4 percent to 221,309 cars year-on-year.

Volvo chief executive Stefan Jacoby attributed the company’s dismal sales performance to the current financial crisis in the euro zone.  Jacoby quipped that the markets were not what the company originally planned, noting that the southern European crisis is spreading to the north.

Jacoby remarked that the car market in this period has the been the most unpredictable it had ever been. For the January to August 2012 period, Volvo’s sales dropped 5.2 percent, suffering from lower sales in south Europe and home market Sweden.

Jacoby confirmed that the carmaker would cut production at its western Sweden factory to 50 cars an hour from the current 57, and it would also not renew the contracts of 285 temporary staff to help reduce costs.

Volvo had said it had invested money into its program of transformation, which includes the new plants in China, as well as on the unveiling of an all-new version of its V40 model. The company added it had been compelled to sweeten car sales with incentives to buyers, but not to the same extent as other carmakers.

Volvo’s newest V40 is a five-door hatchback developed to set new class standards in terms of ride handling, fuel efficiency and safety. Its capabilities are revealed through its coupé-like design, employing styling cues from the C30 coupé and the P1800ES Volvo. Likewise, the Swedish carmaker paid extra attention to the V40’s steering feel and handling, as well as and ride comfort.

Just as expected, the new V40 is a testament to and a continuation of Volvo's leadership position in terms of automotive safety. In fact, the new Volvo V4 comes installed with the new Pedestrian Airbag Technology as well as the Pedestrian Detection with Full Auto Brake -- both groundbreaking safety features ensuring both passenger and especially pedestrian protection.

The new Volvo V40 is the first vehicle in the world that would make use of the new Pedestrian Airbag. This groundbreaking airbag – as soon as the V40 detects that a pedestrian has been hit – would inflate from under the rear edge of its bonnet. The deployed airbag helps protect the head of the pedestrian from the V40’s "hard points," which are located on the base of the windscreen and of the lower section of the A-pillars.

In addition, the deployed airbag raises the bonnet, which in turn helps cushion the impact suffered by the pedestrian. Volvo’s Pedestrian Airbag Technology could be a game changer in the area of vehicle safety, since around 14 percent of traffic fatalities in Europe are pedestrians. In China, more than 25 percent of traffic fatalities are pedestrians.

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Topics: volvo, loss



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