Volvo has finally continued to make a profit!
Geely Group has completed the acquisition of Volvo for four years, and with the strong growth of the Chinese market, Volvo has shown continued profitability.
Recently, Volvo Car announced its first half of 2014 results. The first half of the year's turnover reached 64.785 billion Swedish kronor, the operating profit was 1.21 billion Swedish kronor, and the net profit was 535 million Swedish kronor. For the full year of 2013, Volvo's profit was 1.9 billion Swedish kronor. Volvo Group has said that Volvo Cars has demonstrated its ability to continue to profit.
In the early morning of August 27th, Beijing time, in Stockholm, Sweden, a new generation of Volvo XC90 was launched. It is reported that this model is the first model developed by Volvo after the acquisition of Geely, and is also one of the most important projects under the investment framework of 11 billion US dollars. It will play a key role in the pursuit of Volvo luxury car brand.
However, the dream of narrowing the gap with the first leg of the luxury car camp, Volvo, the leader of the second legion, still faces many challenges.
Reversing the situation In the first half of 2014, the cloud of profit that was enveloped in Volvo was almost completely dispelled.
Since Geely's acquisition of Volvo in 4 years ago, whether Volvo can turn losses and continue to make profits has become a topic of great concern to the industry. In 2012, Volvo once caught the crowd.
In 2012, Volvo Car's operating income was 124.547 billion Swedish kronor, operating profit was SEK 66 million and post-tax loss was SEK 480 million.
Under the bleak performance, Geely Group and Volvo Cars have made significant adjustments to management. In October 2012, Volvo Global President Jacob, who led Volvo Cars to implement the Global Renaissance Plan, was eliminated. The dismissed Jacob was not willing, he complained to the media: "I was abandoned like garbage!"
After Jacob was abandoned, his successor, Hanken Samuelson, failed to reverse the situation in a short time. In the first half of 2013, the performance of Volvo Cars has not improved significantly. In the first half of 2013, the Volvo Car operating profit was SEK - 577 million and the net profit was SEK 7.878 billion.
The turnaround came from the rapid growth of the Chinese market. In 2012, Fu Qiang, the former executive vice president of sales and marketing of Beijing Benz Auto Co., Ltd., officially joined Volvo Car, and was subsequently responsible for the sales of Volvo China. After a series of adjustments, the sales team led by Fu Qian took an active and flexible sales strategy in 2013, which greatly promoted Volvo sales in China. Moreover, the domestic S60 is also listed at the end of the year, further enriching Volvo's product line in China.
According to data released by Volvo, Volvo's sales in China increased by 46% in 2013, making Volvo the fastest growing market in the world. In the case of negative growth in the first half of 2013, with the revitalization of the Chinese market, Volvo achieved a “turnaround into profit” for the whole year with a net profit of SEK 960 million.
In the case of reversing the loss situation in 2013, the performance in the first half of 2014 was further improved, and Volvo is expected to achieve excellent results throughout 2014. Volvo did not predict how much profit will be achieved in 2014, but Volvo Car Group President and CEO Hanken Samuelson made it clear: "The results of the first half of this year have made us excited, with the coming With the launch of the new Volvo XC90 and its continued growth in key markets and the release of upgraded products, sales for the full year of 2014 are expected to grow by nearly 10%."
Similarly, the Chinese market remains the main force for Volvo's growth in the first half of 2014. According to data released by Volvo China, Volvo sold 38,555 vehicles in the first half of China, an increase of 34.3%. The main reason for this growth is that Volvo 60 series products are selling well in China. It is understood that the main contribution of sales growth in China comes from the Volvo 60 series, which is fully equipped with the Drive-E "E-drive smart technology" powertrain. Among them, Volvo XC60 achieved a cumulative sales volume of 16,672 units in the first half of the year, an increase of 38.3%. In addition, Volvo also launched a new car extension service and a national unified basic maintenance standard in China, which has improved customer satisfaction.
Challenge the First Corps to achieve sustained profitability is not the ultimate goal of Volvo. Volvo cars are expected to further narrow the gap with the first camp of luxury cars in the future.
According to Volvo's global recovery plan, Volvo expects to achieve sales of 800,000 units by 2020. The data shows that the Volvo car reached a record high of 458,300 units in 2007. Since then, Volvo cars have experienced a decline in sales after the global financial crisis and the sale of Ford.
If Samuelson predicts that the 10% increase in sales for the full year of 2014 will come true, Volvo cars will usher in a record high. Even so, the gap between the Volvo car and the first leg of the luxury car is still very large. According to 2013 data, BMW, Audi and Mercedes-Benz have annual sales of 1.655 million, 1.576 million and 1.462 million respectively. And from the product line, Audi, BMW, Mercedes-Benz is more abundant. At the same time, from the perspective of channels, the layout of these three luxury car giants is more perfect. Take Mercedes-Benz as an example. At the end of 2012, there were 260 dealer networks, and in 2013, it increased by 75. In 2014, it plans to add another 100 dealers. According to Volvo's plan, the total number of dealer networks in 2014 will reach 170. In 2015, the total number of dealer networks reached 220.
Volvo (China) related people have said to the "China Business News" reporter that we can only say that it is gradually narrowing the gap with the First Army. The new generation XC90 is seen by the outside world as a “killer” that boosts Volvo’s continued profitability and narrows its distance from the First Army. Not only for the top three luxury car brands, but also directly burned the war to the home of the German brand - Germany, this is another important market outside the two core markets of China and the United States.
However, at the time of speeding up the catch, Volvo also faced competition from strong opponents in the Second Legion. In 2013, Lexus sold 520,000 vehicles worldwide. In 2014, Lexus continued to maintain steady growth in sales worldwide. It will take some time for Volvo to overtake Lexus global sales.
But for now, Volvo's catch-up to Lexus in the Chinese market is nearing completion. In the first half of this year, Volvo sold 38,600 units in China, only 700 units less than Lexus's 39,300 units. With such a small gap, with the XC90 made by the Volvo Daqing factory and a number of highly competitive products, Lexus sales in China were overtaken by Volvo during the year.
At present, the Chinese market has replaced the US market as Volvo's largest market, and a number of global models are preparing for localization. Volvo executives expect to advance the goal of 200,000 vehicles in China by 2020 to 2018.
However, whether this goal can be achieved depends on the performance of the new XC90 and other models in the Chinese market. In addition, with the intensification of competition in the Chinese luxury car market, the first camp has expanded strongly. The second-line corps Infiniti and Jaguar Land Rover have promoted localization in China. Under such circumstances, Volvo is still challenging after the Chinese market is overweight.

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