Volvo Cars' Third-Quarter Operating Income Grows Year-on-Year but Loses Over 100 Million

On October 20, 2011, Geely Automobile's subsidiary, Volvo Cars, announced its financial status for the third quarter. Despite an increase in revenue, due to increased investment in technical R&D and currency fluctuations, the company suffered losses.

Volvo Cars said that its operating income for the third quarter was SEK 26.9 billion (approximately US$ 4.064 billion), an increase of SEK 1.5 billion compared with the same period last year, an increase of nearly 6%. However, in the third quarter, Volvo increased its investment in the research and development of new technologies for automobiles. At the same time, it was negatively affected by fluctuations in currency exchange rates, resulting in a loss of 763 million Swedish kronor (approximately US$116 million) after deducting cost expenses, compared with the third quarter of last year. EBIT was 748 million Swedish kronor (about US$113 million).

Volvo CEO Stefan Jacoby said in a statement: “Because of financial market fluctuations, there is widespread concern about consumer confidence. However, at the same time, they are optimistic about the positive development of sales and the strength of the brand, and are positive about the overall outlook for 2011.” The company believes that the seasonal factors bring challenges, so the third quarter losses are "foreseeable" nature, the future of Volvo sales will continue to maintain strong growth.

Overall, in the first nine months of 2011, Volvo’s net profit was 477 million Swedish kronor, which was approximately $72.062 million.