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VOLVO

Geely head to lead Volvo Cars

Li Shufu, the chairman of Chinese firm Geely, will also lead Volvo Cars when the acquisition of the Swedish firm is complete, the two firms said on Thursday.

Geely head to lead Volvo Cars
Photo: Wu Wei/AP/Scanpix

“We have made significant progress in assembling the team that will develop Volvo Cars under Geely’s ownership. Today’s board appointments underline my personal commitment to this famous company,” Shufu said in a statement.

Geely also named Hans-Olov Olsson as vice chairman, who served previously as president and chief executive of the Swedish car maker.

Further management and board appointments, including a new chief executive and chief financial officer, will be announced prior to completion of the takeover, the statement added.

Geely acquired loss-making Volvo Cars in March from US auto giant Ford, paying $2.7 billion dollars in all — a price of $1.8 billion plus $900 million in working capital to improve the brand.

The European Union’s competition watchdog last week cleared the takeover.

Geely has said it plans to expand Volvo’s presence in China, now the world’s largest car market.

Geely has become one of China’s biggest private car makers since launching its auto manufacturing business in 1997. It has annual production capacity of 300,000 cars but has sold fewer than 200,000 abroad since 1997.

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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.

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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