The first half of the year has given the Volvo Car Group a positive outlook as the company returns to profit thanks to a strong presence in China and continued growth in Europe.
Volvo is relatively small in the world stage but it remains to be one of Sweden's top employers and exporters in the auto industry. The company started experiencing an increase in demand towards the latter part of 2013 and that has extended to the current year to give Volvo a nine percent boost in sales from January to July 2014.
According to CEO Hakan Samuelsson, sales is steadily growing so it is expected to close at ten percent by the time the year ends, compared to the company's earlier forecast of five percent. Volvo was acquired by the Zhejiang Geely Holding Group Co. in 2010.
With the year starting out favorably, Volvo remains ambitious about its goals in an effort to gather funds for investments necessary to compete with larger manufacturers."We came in at nearly 10 percent in the first half and for the full year we expect growth to continue at that level," explained Samuelsson per Reuters. The company, however, wants to grow faster than the Chinese market, expecting to churn out over 80,000 vehicles in China until the end of 2014.
Revenues rose by 15 percent to end at 64.8 billion crowns or $9.39 billion while operating earnings are reported at 1.21 billion crowns or $176.5 million. For the same period in 2013, Volvo registered just 577 million crowns or $83.6 million in earnings. Aside from establishing a presence in the premium market to take on BMW and Mercedes-Benz, Volvo also aims to almost double its annual sales figures by 2020 to as many as 800,000 cars.
The XC90 SUV is the first car that Volvo developed after it was acquired by Geely. It is set to launch within the month and is expected to be priced along the same lines as premium cars from German manufacturers.
While business in China is booming, complemented by decent performance in European markets, Volvo is struggling in North America, with only 61,233 cars sold in 2013 in the U.S. The slump is partly due to the lack of new car models introduced by the car manufacturer although Samuelsson has hinted at other challenges that Volvo is facing in the U.S. market. Still, he is positive about future gains, possibly encouraged by the company's overall performance for the first half of 2014.
