Volvo profitability soars

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Rob
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Post by Rob »

Volvo Cars swung to a profit in the first quarter as its new XC90 helped to drive profitability to a level more in line with bigger rivals.

Operating earnings rose to 3.1 billion Swedish crowns ($392 million) in the quarter from a year-ago loss of 11 million crowns, Volvo said in a statement today.

Volvo, a small player compared with Daimler's Mercedes-Benz and BMW, has said it must boost profitability to the level of rival premium carmakers in the coming years, targeting an operating margin of around 8 percent as a benchmark level.

While launch costs for its new S90 sedan and V90 station wagon are likely to weigh later this year, Volvo posted an operating margin of 7.5 percent in the quarter as the pricier XC90 lifted both sales and earnings. By comparison, BMW's operating margin was 9.4 percent in the first quarter.

Net revenue increased 24 percent to 41.7 billion crowns, Volvo said.

"The new XC90 proves that customers like what they see from the transformed Volvo Cars - one in five new Volvo cars sold in the first quarter was an XC90," CEO Hakan Samuelsson said in the statement.

Samuelsson said he expects the new S90 and V90 to have a "similar positive impact" on sales. The cars were unveiled in the first quarter and go into production later this year.

Read more: http://europe.autonews.com/article/2016 ... st-quarter

VolvoFan
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Post by VolvoFan »

I suspect that when the XC40 is released it will be their biggest seller and their profit is likely to increase even more.
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