Volvo on course for 800,000 cars by 2020
At a press conference on 8 February, Volvo Cars presented the company's financial results for 2017. Not only was it Volvo's fourth consecutive year of record sales, the Swedish carmaker also improved revenue. Volvo also announced its outlook on 2018 and the next few years.
Håkan Samuelsson, president and CEO, announced a 7% increase in sales numbers, reaching a total volume of 571,577 units. More importantly, revenue grow 17%, an indication Volvo is improving its premiumness, said Mr Samuelsson.
Volvo reported an increase in operating profit of 27.7%, earning SEK14.1 billion (€1.43bn) compared to SEK11.0 billion (€1.11) in 2016.
Full production capacity
Production capacity has grown considerably. Only a couple of years ago, Volvo only operated production plants in Sweden and Belgium whereas the company is now also manufacturing cars in China and the United States.
Constraints in vehicle allocation led to disappointing sales in the United States in 2017, going down 1.8% after seven consecutive years of growth. Volvo is confident the US market will return to growth in 2018, when production numbers will be higher, as figures for the last three quarters in 2017 appear to illustrate.
Full SUV lineup
The XC40, launched in the back-end of 2017, was received very well and Volvo reports higher visiting numbers in showrooms than ever before. The company is expecting this new small SUV, which completes the brand's SUV lineup, to be a driving force for much of its future sales growth.
Hans Oscarsson, SVP Finance, explained that 2017 was the fifth year in a row that Volvo could finance its own investments. The net cash position is comfortable for future investments, too.
Mr Samuelsson sketched out the group Volvo Cars is evolving into:
- Volvo Cars, including a new segment of ride-hailing cars. Volvo entered a partnership with Uber but is open for other disrupters as this was no exclusive deal.
- Polestar: Volvo's performance brand that was spun off and became its own company in October 2017 will focus on electric vehicles. New technology developed by Polestar will be carried back into mainstream Volvos.
- Zenuity: a joint-venture with Autoliv in which Volvo transferred its software related to autonomous driving.
- Lynk & Co: Volvo owns 30% of its sister company that has already been launched in China. The rest of the world will follow soon.
- Care by Volvo: Volvo's subscription business, for the time being only offered on the XC40. It's early days for this segment but Volvo has high hopes for this new way of reaching customers.
After having renewed its full SUV portfolio, Volvo is set to continue its product portfolio renewal in 2018. The new V60 will be launched in the next few weeks and the S60 has a planned mid-2018 launch date. This new model will be manufactured in the new production plant in Charleston, US.
Somewhat surprisingly, the V40 wasn't mentioned at Volvo's press conference. After the launch of the new S60, this will be the last Volvo model to await a refresh. A new V40 is expected to be announced for 2019.
Volvo is expecting 2018 to be another year of increasing sales volumes and improving profitability, claiming to be on track to reach 800,000 new car sales by 2020.
Photo: Volvo's new complete SUV lineup