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VOLVO

Geely secures Volvo financing: report

The prospective buyers of Sweden-based Volvo Cars, Chinese firm Geely, have confirmed that they have secured the necessary financing for the deal, reports Bloomberg News citing a Geely spokesperson.

Published: 27 November 2009 08:58 CET
Updated: 27 November 2009 12:38 CET
Geely secures Volvo financing: report

Geely Holding Group Co. presented a formal $2.5 billion bid for 100 percent of Volvo Cars back in September after weeks of speculation that they were among the interested parties for the troubled Swedish subsidiary of the US carmaker Ford.

Ford confirmed at the end of October that Geely was its choice of buyer for the firm.

Volvo Group sold its car unit to Ford in 1999 for over $6 billion but the relationship seems destined to be short-lived after Ford announced at the end of last year that it was planning to sell the subsidiary.

Concerns over intellectual-property remain an obstacle to completing the takeover deal however as Ford is set to continue supplying components after a sale.

Similar concerns contributed to the break down of a deal by Beijing Automotive Industry Holding Co.’s to buy General Motors Co.’s Opel unit in July, Bloombergs reports.

Volvo Cars made a loss last year of some 13 billion kronor ($1.85 billion), followed by a loss for the fist six months of 2009 of almost 4 billion kronor.

Geely Group is China’s largest private automaker with annual sales projected to exceed 200,000 for the current financial period.

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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.

Published: 3 February 2021 12:21 CET
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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