Volvo profit rises 17% in 2014 on strong China sales
Volvo Car Corp. said its operating profit in 2014 rose 17 percent in its best year of sales to date as rapid expansion in China took the sting out of the brand's lingering weakness in the United States.
Operating profit increased to $271 million (1.7 billion yuan), the carmaker said. Revenue gained 6.3 percent to 123 billion yuan.
"The company is in an investment phase right now," CEO Hakan Samuelsson said in a statement Thursday. "The fruits of these investments will start to be felt from this year."
The company sold a record 465,866 vehicles last year but is still far from its goal of selling 800,000 in 2020 and making inroads into a premium market dominated by German rivals BMW, Audi and Mercedes-Benz.
Volvo deliveries in China jumped 33 percent last year to 81,221 vehicles. More than two-thirds of the company's China sales were generated by two locally produced models -- the Volvo XC60 crossover and the stretched S60 sedan.
China now is Volvo's largest market. To maintain sales momentum, Volvo launched production at its second China plant in the northeast China city of Daqing last year.
Volvo is banking on continued strong growth in China to generate volumes needed to foot the bill for billions of dollars of investment in new models, but also needs growth elsewhere.
Samuelsson told Reuters that Volvo expects to reach sales of about 500,000 vehicles this year by outpacing underlying markets in Europe and China and returning to growth in the U.S. "We are planning for a new all-time high this year," Samuelsson said. "We also see a clear improvement in profitability during the second half."
The automaker will start deliveries of the new XC90 crossover during the second quarter of this year. The new XC90 replaces a version built since 2002 and is the first vehicle to be introduced after a five-year, 67 billion yuan investment program to produce a broad range of models on a new modular platform it developed in-house.
Volvo was bought from Ford Motor by billionaire Li Shufu's Zhejiang Geely Holding Group Co. in 2010.
Zhejiang Geely's listed arm, Geely Automobile Holdings, said in December it expected full-year net income to fall about 50 percent because of declining sales and a slumping Russian ruble.
In 2013, the company's net income was 2.7 billion yuan. Li said he's revamping the Geely brand, replacing its Emgrand, Gleagle and Englon model lines.
"The company is in an investment phase right now," CEO Hakan Samuelsson said in a statement Thursday. "The fruits of these investments will start to be felt from this year."
The company sold a record 465,866 vehicles last year but is still far from its goal of selling 800,000 in 2020 and making inroads into a premium market dominated by German rivals BMW, Audi and Mercedes-Benz.
Volvo deliveries in China jumped 33 percent last year to 81,221 vehicles. More than two-thirds of the company's China sales were generated by two locally produced models -- the Volvo XC60 crossover and the stretched S60 sedan.
China now is Volvo's largest market. To maintain sales momentum, Volvo launched production at its second China plant in the northeast China city of Daqing last year.
Volvo is banking on continued strong growth in China to generate volumes needed to foot the bill for billions of dollars of investment in new models, but also needs growth elsewhere.
Samuelsson told Reuters that Volvo expects to reach sales of about 500,000 vehicles this year by outpacing underlying markets in Europe and China and returning to growth in the U.S. "We are planning for a new all-time high this year," Samuelsson said. "We also see a clear improvement in profitability during the second half."
The automaker will start deliveries of the new XC90 crossover during the second quarter of this year. The new XC90 replaces a version built since 2002 and is the first vehicle to be introduced after a five-year, 67 billion yuan investment program to produce a broad range of models on a new modular platform it developed in-house.
Volvo was bought from Ford Motor by billionaire Li Shufu's Zhejiang Geely Holding Group Co. in 2010.
Zhejiang Geely's listed arm, Geely Automobile Holdings, said in December it expected full-year net income to fall about 50 percent because of declining sales and a slumping Russian ruble.
In 2013, the company's net income was 2.7 billion yuan. Li said he's revamping the Geely brand, replacing its Emgrand, Gleagle and Englon model lines.
