Volvo Cars today reported its highest ever quarterly operating profit of SEK4.2 billion for the second quarter of 2018, an increase of 28.6 per cent compared with the same period last year driven by a strong increase in global retail sales.
Revenue in the second quarter increased by 26.9 per cent to SEK66.0 billion, as retail sales rose 14.6 per cent to 170,232 cars. The operating profit margin for the period came in at 6.4 per cent, up from 6.3 per cent the same period last year.
For the first six months of 2018, Volvo Cars reported an operating profit of SEK7.8 billion, an increase of 15.7 per cent compared to the same period last year and the highest ever profit for a six-month period.
Revenue in the first half of 2018 increased by 23.6 per cent to SEK122.9 billion, boosted by the company’s best ever first six months of sales of 317,639 cars, an increase of 14.4 per cent compared to the first half of 2017. The operating profit margin for the period came in at 6.4 per cent.
“These results confirm that Volvo Cars is now well-positioned for a new period of sustainable global growth,” said Håkan Samuelsson, president and chief executive. “I expect us to achieve another year of record sales in 2018, as we aim to establish ourselves as a diversified, global mobility provider under our new vision Freedom to Move.”
Since being acquired by Zhejiang Geely Holdings in 2010, the company has completely transformed operations. It has expanded its global manufacturing footprint and completely renewed its model portfolio in recent years. In the first half of 2018, it launched the new V60 premium estate and S60 premium sedan, while it opened a brand new manufacturing facility in South Carolina, its first in the US.
Volvo Cars recently announced new ambitions for the upcoming years, highlighting its ongoing transition from being merely a car maker into a provider of mobility services.
Volvo Cars aims to position itself as a leading player in the global automotive business. The longer term ambition is to generate half of all sales annually from fully electric cars, one third of all cars sold to be autonomous driving cars and provide half of all cars it offers to customers via its subscription service.
It expects these initiatives to transform its connection to its customer base, with the aim to build a total of over 5 million direct consumer relationships some time by the middle of the next decade, creating new sources of recurring revenue. This will also offer the company far greater potential to develop connected and other services for customers.