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SAAB

Motown Maud looks to car industry’s future

Sweden's industry minister Maud Olofsson in Motown to discuss the future of the Swedish car industry with representatives of the US car industry at the Detroit Motor Show.

Olofsson, who professed that it was “fun to be minister for cars”, was centre of attention when Volvo unveiled its 3.2 litre ethanol concept car.

“It’s really cool,” was Olofsson’s verdict on the car. Olofsson has long been one of the governing Alliance’s strongest advocates of green motoring, and herself drives an ethanol powered car.

The real business of Olofsson’s trip over the pond was to discuss how Sweden’s car-making industry could stay competitive in an age when uncertain oil supplies and climate change mean that cars that use less fuel and have lower emissions are in favour.

Olofsson is expected to meet representatives from Ford, which owns Volvo Cars, and General Motors, which owns Saab. Among the executives she will be meeting are Ford Europe chairman Lewis Booth and GM’s head of purchasing Bo Andersson, a Swede.

Olofsson said the aim of her meetings is to find out what the Swedish government needs to do to create a good climate for the car industry.

“The car industry represents 15 percent of Swedish exports and creates large numbers of jobs.”

Among the topics Olofsson is expected to raise with Ford are Volvo’s decision to stop producing gas-powered cars.

The minister said that the fact that so few gas cars had been sold in Sweden was related to the scarcity of gas fuelling stations. But Olofsson added that she expected the number of gas pumps to rise, just as ethanol is now more widely available.

Olofsson also said she understood the need for green cars to be attractive, adding that there was a need for women car designers.

“The consumers of the future will not dress themselves in sackcloth and ashes. They’ll want cool, functional cars with modern design, but they will also want to be environmentally friendly.”

VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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