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Slowing demand for EVs, partly due to a lack of affordable
models, as well as the effects of EU, U.S. and Canadian tariffs
on electric cars made in China have made market conditions
increasingly difficult for automakers.
Volvo Cars, which is majority-owned by China's Geely, lowered
its target for operating profit margin excluding joint ventures
and associates to 7-8% from above 8%.
It also scrapped a sales goal of 550 billion-600 billion Swedish
crowns ($53.5 billion-58.4 billion), instead saying it expected
to outgrow the premium car market.
It cited "increased complexity especially in relation to global
trade and tariffs".
This is the second time in a year that Volvo has walked back
margin and revenue goals, after stepping away in January from a
target for annual EBIT of between 8-10% and sales of 1.2 million
cars annually by mid-decade first announced in 2021.
"The sharpened business ambitions we announce today further
reinforce our commitment to drive value as a business, while
remaining true to our purpose," CEO Jim Rowan said in a
statement.
"As I have said before - business is not a game of perfection,
it's about continuous progress and adaptation," he added.
Shares in Volvo Cars were up 3% at 0744 GMT, having fallen on
Wednesday as the company lowered its electric vehicle car sales
ambition. Year-to-date, shares are down 10%.
In releases ahead of a planned investor event in Gothenburg,
Volvo said that starting with its flagship electric EX90 model -
which the Swedish automaker will begin delivering to customers
this month - it will have a single "technology stack" for all
car models.
Volvo Cars said separately it will use a single software system
backed by powerful chips from Nvidia for all future models and
will rely on "megacastings" - massive presses to make large
single-piece aluminium vehicle underbodies - to cut costs for
electric cars.
Chief Engineering & Technology Officer Anders Bell said that
through the use of megacasting, Volvo will be able to increase
the use of recycled aluminium and cut emissions throughout its
supply chain.
It also reported separately on Thursday a 3% year-on-year
increase in car sales in August.
($1 = 10.2815 Swedish crowns)
(Reporting by Nick Carey, Marie Mannes and Anna Ringstrom;
editing by Jason Neely and Jan Harvey)
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