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Auto manufacturing company to implement job reductions, fueled by a £1.4bn cost-reduction initiative, as escalating tariffs and electric vehicle market slowdown take a toll
Swedish auto titan Volvo's unveiling a brutal £1.4bn cost-cutting mission amidst tumultuous market surges, akwwardly including a nose-dive in electric vehicle (EV) sales.
Amongst the austerity measures, Volvo has hinted at some layoffs around the globe, stingily avoiding details regarding specific locations and job numbers. Expect cuts staring from the coming year, they announced while unveiling their first quarter earnings on Tuesday.
Owned by Chinese conglomerate Geely, Volvo's ambitious revenue-saving strategy aims to save them a whopping 18 billion Swedish krona. The move is intended to secure profitability and deliver structural efficiencies on direct and indirect costs.
Volvo finds itself in the eye of a merciless financial storm as legacy automakers struggle with issues including trade turmoil provoked by Uncle Sam, the persistent decline in demand in the Middle Kingdom, and a moderating EV appetite.
In March, Volvo's electric car sales shows a staggering 25% drop, only days after reinstating Håkan Samuelsson as their CEO to steer the company through these troubled waters for the next two years.
First quarter financial tallies from Volvo in 2025 exhibit a disheartening 6% drop in global automobile deliveries to 172,000, resulting in a worrying 11.7% slip in revenue from £7.3b to £6.4b.
This dismal performance was attributed to a strategic inventory reduction at the end of last year. In March, Volvo sold 70,737 cars globally, representing a 10% decline compared to the same month in 2024, with their electric cars suffering the greatest losses.
In the first financial quarter of 2025, despite having heavily invested in EV transition, only 19% of Volvo's deliveries were fully electric (a fall from 21% in March 2024).
Due to unforeseen delays in charging infrastructure development, government incentive withdrawals in certain markets, increased tariffs, and reduced demand for battery vehicles, Volvo has opted to shift gears by aiming for 90-100% of global sales to be either pure electric or plug-in hybrids by the end of the decade.
Håkan Samuelsson (pictured), who was appointed as Volvo Cars CEO on 30 March, returns to bolster the brand during these challenging times. With the company's crystal-clear strategic direction, they aim to improve results, drive profitability, accelerate electrification, and refine regionalization strategies.
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Volvo joins the list of EV doubters as it shelves ambitious plans to go fully electric by 2030Following in the footsteps of other car manufacturers, Volvo has released disappointing Q1 earnings, reporting a 66% collapse in after-tax profits from £1.9 billion to just £670 million. Uncertain economic conditions and increased uncertainties have prompted Volvo to discontinue providing financial guidance for both 2025 and 2026.
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Other manufacturers sound a gloomy tune as well: Volkswagen Group, the parent company of various coveted brands such as VW, Audi, Bentley, Porsche, Seat, and others, experienced a 40% decline in Q1 profits, pinned on the rise of EV sales that come with lower profit margins and global market unpredictability.
As if the automotive industry wasn't reeling enough, car stalwart Stellantis - the owner of such beloved brands as Citroen, Fiat, Peugeot, Vauxhall, and others - saw a staggering 14% drop in revenue, reaching just under £30.6 billion during the first quarter of 2025. These lean years have been blamed on vehicle pricing reductions in key markets, as well as reduced shipments.
In similar fashion, the once-unstoppable Japanese auto giant Nissan announced this week that it anticipates a jaw-dropping £4 billion net loss in revised earnings for the fiscal year, while embracing massive cost-saving initiatives aimed at preventing the company from plummeting over the brink of financial despair amidst slumping sales in China and the US, its two largest markets.
- Volvo, citing technology advancements and market fluctuations, has confirmed plans to increase efficiencies in their operations, with targeted savings of 18 billion Swedish krona by 2025.
- In a surprising move, Volvo, the Swedish automaker, has reportedly shelved its ambitious plans to go fully electric by 2030, following the footsteps of other manufacturers, due to economic uncertainties and unforeseen challenges.
- Amidst a tumultuous automotive market, Volvo, owned by Chinese conglomerate Geely, has decided to refine its regionalization strategies and accelerate electrification, preparing for 90-100% of global sales to be either pure electric or plug-in hybrids by the end of the decade.
- In the face of challenging financial performance, Volvo, like other manufacturers such as Volkswagen Group and Stellantis, has announced cost-cutting measures to navigate the storm, with after-tax profits taking a significant hit in the first quarter of 2025.
