Volvo Cars’ first quarter 2017 operating profit rises 11 per cent to SEK3.5 billion

Volvo Cars reported an operating profit of SEK3.5 billion (~R5.29 bn) for the first three months of the year, up 11 percent from SEK3.1 billion (~R4.68 bn) during the same period last year. The increase was mainly driven by strong demand for the company’s XC60 and 90 cluster cars.

The company also reported an operating profit margin of 7.3 percent, down from 7.5 percent last year. Profitability was partly offset by costs related to the launch of the new 90 series cars and the all-new XC60, as well as continuous investments in new technologies and a rising number of employees. Since the first quarter of 2016, Volvo Cars has welcomed almost 5 000 new employees, bringing the total global workforce to 33 000.

Global retail sales increased by 7.1 percent to 129 148 cars in the January to March period, resulting in first quarter revenue of SEK47.6 billion (~R71.91 bn), up 13 percent from SEK42.0 billion (~R63.45 bn) last year.

“In the first three months we have seen strong demand for our 90 series cars as they reached markets worldwide,” says Håkan Samuelsson, president and chief executive. “We also unveiled the all-new XC60 in the first quarter and we expect this car to have a positive impact on sales and profitability.”

In March, Volvo Cars unveiled the all-new XC60 model at the Geneva motor show, which was received to great acclaim. Later this year, Volvo Cars will launch the new XC40, based on the new CMA small vehicle platform, positioning the company for further growth in the fast-growing SUV segment.

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The Asia Pacific region reported sales growth of 16 percent in the first quarter with 32 872 cars, boosted by a strong performance in China, Volvo Cars’ largest market. There, sales rose by 18.8 per cent to 23 335 cars, following strong demand for the locally-produced XC60 and S60L models as well as the XC90 and S90.

Sales in the EMEA region increased by 9.2 percent to 78 820 cars sold, on the back of strong performances in Sweden, the United Kingdom and Germany. The region continued to see strong demand for the new V90 and XC90 as well as Europe’s most popular premium mid-size SUV, the XC60.

The Americas region reported sales of 16 641 cars, of which 13 476 are in the United States. The XC90 remained the best-selling model in the Americas.