Geely's Volvo posts profit rise as Chinese growth gives boost

Thursday, Jul 20, 2017

Volvo Car Group reported a 21 percent rise in first-half earnings on Thursday, helped by higher turnover in Europe and China, keeping it on track for record full-year sales.

Under Chinese ownership since being bought by Zhejiang Geely Holding Group from Ford in 2010, Volvo has begun to take on larger rivals such as BMW and Daimler's Mercedes-Benz, carving out a niche in the premium market with a string of new models.

Volvo, one of Sweden's biggest companies by revenue, posted operating earnings of 6.8 billion Swedish crowns ($820 million) for the six months to June 30, against 5.6 billion crowns in the same period last year.

Net sales rose to 99.1 billion crowns, up from 84.2 billion crowns.

"Globally, we expect the pace of growth generated in the first half of the year to continue. We are confident we will report another record year in terms of sales," Volvo Chief Executive Hakan Samuelsson said in a statement.

The company aims to reach sales of 800,000 cars within the next few years. It sold 277,641 Volvos in the first half, up 8.2 percent from a year ago, as strength in China and Europe offset a lingering U.S. slump.

Delivery problems have dogged Volvo in the United States this year, contributing to a 7 percent drop in first-half sales there. It does not have a manufacturing base in North America but is building a U.S. plant to boost supply.

Samuelsson said the company expects an upturn in the second half of the year to deliver "solid full-year growth" in the United States.

"Delivery constraints affected first-quarter sales," he said, "but a return to growth during the second quarter and the impending start of delivery of the new XC60 mid-size SUV point to a stronger finish."

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