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On April 17, Volvo Group released its financial results for the first quarter of 2024. Data show that Volvo's net sales in the first quarter of 2024 were 131.2 billion Swedish kronor (about 86.798 billion yuan), basically the same as the same period last year, but exceeded the market estimate of 129.18 billion Swedish kronor; adjusted operating profit was 18.16 billion Swedish kronor (about 12.015 billion yuan), exceeding estimate of 17.24 billion Swedish kronor; adjusted operating profit margin was 13.8%.

In terms of sales, Volvo accumulated global sales of 182687 vehicles in the first quarter of 2024, up 12% from a year earlier. Subdivided into major markets, Volvo accumulated sales of 89670 vehicles in Europe in the first quarter, up 23% from the same period last year; 30950 in the US, up 17% from the same period last year; and 37958 in China, up 4% from the same period last year. Among them, sales of new energy models were 2443, down 36% from the same period last year.

Taken together, Volvo Group's overall performance is OK, but Volvo still lacks bright spots in terms of sales in China's new energy market.

Volvo is considered to be one of the first traditional luxury brands to start the electrification transformation, and it is now speeding up the electrification transformation. Volvo's last XC90 SUV, the last Volvo car with a diesel engine, went offline at Volvo's plant in Toslanda, Sweden, on March 26th. This move means that Volvo officially bid farewell to the 45-year history of diesel production and enter a new electrified era. However, Volvo officials say it will still produce cars with gasoline engines until 2030, when it will only produce electric cars. Prior to this, Volvo proposed a comprehensive electrification strategy in 2017 and further deepened and clarified the market layout in 2021.

"Automotive Industry concern" believes that Volvo's rapid layout of electric transformation is a sign of embracing the market, but as the first car company to announce that it will stop the research and production of internal combustion engines and make a comprehensive transition to electrification in the future, most of the electric models currently sold in Volvo's second largest market in the world, the Chinese market, are still "oil-to-electricity" products, which is also the key reason why it is difficult to improve its sales.

So far, Volvo's sales in the Chinese market still rely on fuel cars, and the only electric cars are mainly mixed models. According to the official website, Volvo's domestic models in China include S90, S60, XC60 and XC40, of which S90, S60 and XC60 launch plug-in hybrid models on the basis of fuel vehicles, while XC40 introduces pure electric models on the basis of fuel vehicles.

Retail data show that in the first quarter of this year, the top three Volvo models sold in China in 2023 were XC60, S90 and S60, respectively, with sales of 16448, 8425 and 4090 respectively, followed by XC40 with 1868, and the rest were less than 1,000. Obviously, in China's new energy market, Volvo has obviously lagged behind Audi, Mercedes-Benz, BMW, Tesla and other luxury car companies.

It should be noted that the Chinese market has become the largest seller of new energy vehicles in the world. with the intensification of the domestic new energy vehicle market, Volvo is facing the pressure to fully realize the electric transformation in China. "how to speed up the development of the electrified transformation of the Chinese market" is still a difficult problem for Volvo, and Volvo urgently needs to launch a model that can prove its strength in luxury electric vehicle technology.

Generally speaking, despite Volvo's strong determination in the transformation of new energy, it still has a lot of homework to make up for if it wants to run further on the new energy track. As for whether Volvo can deliver a satisfactory "report card" under the "radical" transformation strategy, it is worth looking forward to.

Volvo's sales target is to grow by 15% this year.

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