Volvo Car plummets to an all-time low in Stockholm following a loss-making quarter

(Il Sole 24 Ore Radiocor) - A larger-than-expected quarterly loss and the announcement of 2,500 job cuts have sent Volvo Car on the Stockholm Stock Exchange. Shares in the car and SUV manufacturer, which is controlled by China’s Geely Holding, hit a low of 9.64 kronor, their lowest level since listing in 2021. Since the start of the year, its shares have lost more than two-thirds of their value.

Focusing on the third quarter, Volvo Car reported a net loss of 5.7 billion Swedish kronor (approximately 513 million euros), compared with a profit of 4.5 billion a year ago, and an operating loss of 3.7 billion Swedish kronor for the quarter (compared with a profit of 5.8 billion), which was significantly higher than analysts’ expectations. EBITDA then fell from 12.1 to 2 billion kronor on revenue of 66.9 billion kronor (6 billion euros), down 23 per cent year-on-year. Car sales fell by 11 per cent to 141,300 units. In recent months, however, the car manufacturer has had to contend with fluctuating demand for electric vehicles, mounting tariff pressures and the deterioration in market conditions in China. So much so that at the start of the month it withdrew its forecasts for full-year sales volume and cash flow. Indeed, ‘in light of an increasingly difficult market situation and worsening market prospects for the coming quarters, Volvo Car has decided to no longer provide forecasts for the rest of the year’, reads the company’s statement.

Furthermore, in addition to the previously announced cost cuts totalling 23 billion kronor, Volvo Car intends to further reduce overheads and variable costs by a further 5 billion kronor, with savings expected to materialise by the end of next year. To this end, it has announced measures that will affect around 6 per cent of its workforce, including around 2,000 jobs in Sweden, through the termination of consultancy contracts, natural wastage and targeted redundancy packages. These cuts are in addition to the 3,000 jobs already announced previously. “The third quarter of 2026 was very disappointing and reflects a year that has proved far more challenging than initially anticipated,” said CEO Hakan Samuelsson. “Our ongoing restructuring plan therefore needs to be significantly strengthened.”

In any case, the Swedish company’s figures and announcements proved disappointing for analysts. “Volvo Car’s results were significantly below expectations in the third quarter due to weakness in the Chinese and US markets,” writes Jefferies, for whom the biggest “surprise” was “the 19 per cent year-on-year decline in wholesale volumes”. The experts also highlight the 50 per cent drop in revenue in China, linked to new Chinese alternatives that “are eroding the profitability of traditional brands”. All this whilst the US “has been hit by tariffs and the withdrawal of incentives for electric vehicles”.

Experts at Bernstein share this view, finding it difficult “to see any improvement in the short term”, despite further restructuring measures. “The third quarter was very weak,” they explain, “which should come as little surprise given the recent withdrawal of the full-year forecasts”. Furthermore, Volvo “is facing pressure similar to that of other long-established brands, where third-quarter volumes have fallen by over 40 per cent, and it lacks a large-scale, profitable operation in Europe or the United States capable of offsetting this decline”. For this reason, the outlook is uncertain: “The new chief executive Klaus Zellmer, who is due to take up his post in October 2027,” says Bernstein, “now faces an even more daunting task than when his appointment was announced a month ago.”