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VOLVO

Toyota wins case over Volvo ‘safest car’ claims

Sweden's Market Court (Marknadsdomstolen) has ruled that Volvo Car's marketing of its XC60 vehicle as the "safest in the world" is misleading and lacks supporting evidence.

Published: 12 March 2010 13:47 CET
Toyota wins case over Volvo 'safest car' claims

“Volvo has not presented any proof at all which verifies or even indicates that the XC60 is the safest in the world. Volvo’s claim is a general one and clearly lacks substantiation,” the court said in its ruling on a case brought by Japanese firm Toyota.

Volvo has been warned that it will incur a fine of one million kronor ($140,000) if it does not desist from making the claims.

The court based its judgement of the firm’s marketing on the message conveyed to the average consumer, which according to Swedish law has to be based on credible verifiable claims.

The case dates to a marketing campaign launched in the beginning of 2009. Some of the advertisements – in print, television and internet sources – forwarded various claims pertaining to the XC60’s security or safety characteristics.

Some of the slogans used in the campaign included “…in other words – the safest in the world,” and “the most fuel-efficient in its class – the safest in the world.”

As a result of Volvo’s claims, rival car company Toyota reported the matter to the Market Court. Volvo has been ordered to pay Toyota’s court costs of 1.035 million kronor.

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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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