Volvo Car AB shares plunged around 30% to a record low after the Swedish automaker announced plans to eliminate another 2,500 jobs and warned that traditional Western-developed vehicles are losing ground rapidly in China, Bloomberg reported.
Volvo’s deliveries in China fell more than 40% in the third quarter as domestic automakers gained ground in the electric vehicle market amid weakening consumer demand. The company, controlled by China’s Geely, was valued at 29.8 billion kronor (approximately US$2.68 billion), around 80% below its valuation when it went public in 2021.
“Nobody will be successful with the old recipe where you had global cars developed in Europe and sold them at a premium price” in China, CEO Håkan Samuelsson said during an analyst call. “Those times are gone.”
Volvo Expands Cost-Cutting Measures
The additional job reductions will affect approximately 6% of Volvo Cars’ workforce and form part of a plan to achieve another five billion kronor in cost savings. Most of the cuts are expected to take place in Sweden, following around 3,000 job eliminations announced last year.
Volvo’s latest quarterly results also showed a loss significantly larger than analysts had anticipated. The company cited weaker Chinese demand, US tariffs and the removal of electric vehicle subsidies in the United States as contributing pressures.
Other established manufacturers, including Volkswagen and BMW, are also restructuring operations and expanding local development efforts in China to respond to domestic competitors.
China Requires a Different Product Strategy
Chinese automakers are competing through lower prices, advanced digital features and faster vehicle development cycles. Domestic brands have increasingly tailored their products to local preferences, including sophisticated voice recognition and in-car entertainment systems.
Samuelsson acknowledged that he had underestimated the speed of change in China’s automotive market. Volvo now intends to make greater use of technology and vehicle platforms developed with Geely, its parent company since 2010.
“In China, you need to come back with regionally developed products with Chinese software, and there we of course have a huge advantage that we can work and develop those cars together with Geely,” Samuelsson said in a Bloomberg Television interview.
BMW is preparing to launch its iX3 SUV in China, while Volkswagen and other Western manufacturers are reassessing their strategies as competition intensifies in the country.
New Models Planned for Western and Chinese Markets
Volvo plans to introduce seven new vehicles for Western markets and six regionally tailored models for China by the end of the decade. The strategy reflects an effort to address different consumer preferences while improving the company’s competitive position.
The automaker has continued to grow sales in Europe, although Chinese brands are expanding their presence there. Chinese manufacturers, including BYD, are also establishing production facilities in the region, potentially reducing their dependence on imported vehicles.
Samuelsson, who returned as CEO in April 2025 after previously leading Volvo for a decade through 2022, is preparing to hand over the role to former Skoda chief Klaus Zellmer. Zellmer is expected to take over no later than October 1, 2027.
Volvo’s restructuring highlights the challenges facing established automakers as Chinese competitors reshape pricing, technology expectations and development timelines. Its ability to use Geely’s technology and deliver products tailored to individual markets will be central to its efforts to restore competitiveness.