Volvo Cars cautioned on Thursday that 2025 will be a turbulent and competitive year, with the automaker potentially struggling to match its 2024 sales and profitability. The warning sent Volvo’s shares down 9.2% after it reported a lower fourth-quarter profit.
“We’re going to see more turbulence,” CEO Jim Rowan told Reuters. “We’re going to see more hyper-competition, China will remain very, very competitive, and we’ll start to see more competition in Europe.”
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The Swedish-based automaker, majority-owned by China’s Geely, is facing similar headwinds as other global carmakers. A weakening European market, prolonged price wars in China, and lower-than-expected EV demand in Europe and the U.S. have put pressure on growth. European and U.S. tariffs on Chinese-made EVs are also a concern for Volvo, which is shifting production out of China but faces near-term tariff impacts.
With former U.S. President Donald Trump threatening tariffs on European imports, Rowan told analysts that Volvo has the “flexibility to increase production” at its Charleston, South Carolina, plant to mitigate risks.
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Rowan said that slowing car demand and aggressive pricing would make it “challenging to reach the volumes and profitability” achieved in 2024. Analysts viewed the warning as a sign of a weaker-than-expected annual result. “This would point to an annual result well below current sell-side consensus,” said Bernstein analyst Harry Martin. Handelsbanken analyst Hampus Engellau described Volvo’s fourth-quarter performance as “soft.”
Volvo’s 2024 retail sales grew 8%, aligning with its revised forecast after lowering expectations from 12-15% growth. In September, the automaker adjusted its electrification strategy, opting to sell hybrids for longer than initially planned.
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The company reiterated its scaled-down 2026 guidance, including a profit margin target of 7-8%. Fourth-quarter operating profit fell to 3.9 billion Swedish crowns ($357 million) from 5.4 billion a year earlier, including a 1.7 billion crown writedown on its battery joint venture Novo Energy. Excluding joint ventures and associates, profit was 6.3 billion crowns, down from 6.7 billion but ahead of analysts’ expectations of 5.8 billion crowns.