Volvo Cars stock plunged Friday after the company announced plans to cut 2,500 jobs, following a sharp decline in its Chinese market that weighed on third-quarter earnings.
The Swedish automaker posted an operating loss of $563.7 million in the third quarter, compared with an operating profit of 6.4 billion kronor in the previous quarter.
“It’s really a lot about the Chinese market, of course, where the change has come faster than we thought, and really now we can see that selling global cars developed in Europe and China will not work, and then this is affecting all the Western players in China,” Volvo Cars CEO Håkan Samuelsson said in an interview on Friday following the release. “We need a new strategy in China… it has to be a more regional structure, a more empowered region, and we need regionally adapted cars.”
He added that Volvo Cars needs to share some platforms with its Chinese parent company Geely, and develop key software in China. “If you don’t have that, I think you cannot sell cars in China.”
Regarding the US side of the company, Samuelsson said in the earnings release: “In the US, we are continuing to work closely with our retail partners to improve our sales performance. We have divided the market into four regions to bring product offering, market- ing and sales closer to the customers. We are fast-tracking the production start of the long-range plug-in hybrid versions of the XC90 and XC60 with European deliveries starting this year and the US shortly after. In Q1 2027, we will localise XC60 production in Charleston. And by the end of the decade we will localise a second all-new car with multi-ple powertrain options.”
Volvo Cars shares fell nearly 26% following the announcement.
Read CEO NA’s exclusive interview with Volvo Cars’ Michael Cottone, President, USA & Canada.
By CEO NA Editorial Staff
