Volvo Cars’ Q3 profit rises slightly as cost cuts outpace tariff impact
Volvo Cars reported a modest increase in third-quarter profit on Thursday, with aggressive cost-cutting measures helping offset the effects of U.S. tariffs and intense market competition.
The Swedish automaker, majority-owned by China’s Geely Holding, said its operating profit before restructuring costs reached 5.9 billion crowns ($627 million) in July–September, up from 5.8 billion a year earlier, despite a 7% drop in sales. Fully electric vehicles accounted for less than a quarter of total sales, News.Az reports, citing Reuters.
Profitability improved from the second quarter, with Volvo’s gross margin widening to 24.4% from 17.7%, thanks to the revamped XC60 model and deeper supply-chain collaboration with Geely.
CEO Hakan Samuelsson, who returned to the role earlier this year, said the company’s cost-cutting program — including 3,000 job reductions and investment slowdowns — is delivering results faster than expected.
“What we’re now seeing is really, wow okay, this is delivering faster than we thought and faster than we planned,” Samuelsson told Reuters.
Volvo, one of the European automakers most exposed to U.S. tariffs, recently began shifting hybrid production to the U.S. to reduce risk. A new EU-U.S. trade agreement, effective retroactively from August 1, lowered U.S. tariffs on European cars from 27.5% to 15%, easing some pressure on the company.
“Recent tariff agreements offer much-needed clarity,” Samuelsson said, adding that Volvo still faces “price competition and the effects of U.S. import tariffs.”
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