AutoBeta(AutoBeta.net)07/22 Report--

As a wholly-owned subsidiary of Geely holding Group, Volvo inevitably suffered a huge impact under the spread of the global epidemic, and suffered operating losses in the first half of the year.

On July 21, Volvo released its first-half results, with revenue of 111.8 billion Swedish kronor in the first half of 2020, down 14.1 percent from a year earlier, and an operating loss of 989 million Swedish kronor, compared with a profit of 5.519 billion Swedish kronor in the same period last year. The net loss was 1.171 billion Swedish kronor (about 920 million yuan), down 134.5 percent from the same period last year.

After Geely holding Group took over, Volvo's profitability continued to improve, while its performance declined in the first half of 2020. From profit to loss, we can see the huge impact of the epidemic on the profits of car companies.

Volvo said it expected results to pick up in the second half of the year, with sales and profits returning to levels last year. "if the market recovers as we expected, we expect total sales to return to levels in the second half of 2019. Our goal is to return to similar levels of profitability and cash flow. " So says Hakan Samuelsson Samuelson, chief executive of Volvo.

In terms of sales, Volvo's global sales in the first half of 2020 were 269962, down 20.8% from the same period last year, and sales fell sharply in many regions, while the Chinese market is still a strong support for Volvo.

Volvo sold 15105 new cars in China in June, up 14.1 per cent from a year earlier, with cumulative sales of 65741 in the first half, down 3 per cent from a year earlier. Although Volvo's performance was seriously affected by the epidemic in the first quarter, it achieved sales growth in markets such as China in the second quarter, further making up for Volvo's losses.

In the rest of the region, Volvo sold 123000 vehicles in Europe in the first half, down 29.5% from a year earlier, 43200 in the US market, down 13.7% from a year earlier, and 37900 in other markets, down 21.9% from a year earlier.

It is worth mentioning that Volvo announced a large-scale global recall program not long ago, which has a negative impact on Volvo's operating profits. The company will recall nearly 2.2 million cars made between 2006 and 2019, including Volvo S60, S60L, S60CC, V60 and S80 models, the largest recall in Volvo's history.

Volvo said the reason for the recall is that in extreme cases, the cable in the rubber cover on the outside of the seat is damaged, which may reduce the restraint function of the seat belt. Volvo also said that it had not received any reports of accidents related to the defect and that the recall measures were preventive to avoid any problems that might arise in the future.

In addition, the planned merger of Volvo and Geely has been suspended because of Geely's A-share listing. Volvo said the merger of the two companies would be put on hold because Geely's board of directors had approved a preliminary proposal to issue renminbi shares and list them on the Shanghai Stock Exchange's Kechuang board. A Volvo spokesman said the two sides are likely to resume negotiations this autumn once Geely ends its activities.

In February, Volvo and Geely jointly announced plans for a merger. Volvo announced that it is planning to restructure its business with Geely and that the reorganized assets will be included in Geely's Hong Kong-listed company and will consider a future listing in Sweden. Volvo said the integration was aimed at promoting deeper cooperation between the two sides and more effective coordination in technology research and development, cost control and finance. Li Shufu, chairman of Geely holding Group, expressed the hope that through this integration, cooperation and coordination will be further strengthened and greater growth potential will be tapped.

According to information, Volvo was acquired by Ford in 1999. Due to poor follow-up management and other reasons, Geely holding Group acquired all shares of Volvo with US $1.8 billion in 2010 and became a wholly-owned subsidiary of Geely Holdings.

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