Sweden’s Volvo Cars, owned by China’s Geely Group, said Thursday that annual profits rose in 2024 despite a final quarter slowdown but that the outlook for this year is tougher.
The group turned in a 13 percent rise in net profit to 15.9 billion kronor ($1.5 billion) last year thanks to sales rising eight percent and cost savings.
After a dynamic first half of 2024, Volvo Cars said it had experienced a more difficult second half, CEO Jim Rowan revealed in the firm’s annual report as slowing demand impacted sales and results.
The manufacturer expects that trend to continue this year, forecasting 2025 will be a “very difficult year” for the sector and for Volvo Cars as analysts predict minimal growth given “cyclical, structural, transformational and geopolitical uncertainties.”
Volvo Cars said the manufacturer could be hit by tariffs in the European Union on vehicles manufactured in China, but also in the United States.
In response the group plans to transfer production of one of its models from China to its plant in Ghent, Belgium.
Volvo Cars shares slumped back around 11 percent mid-afternoon on the Stockholm Stock Exchange, with investors disappointed over year-end profitability and concerned about the 2025 outlook.
In the last quarter of 2024, the group recorded a 28 percent drop in operating profit to 3.9 billion kronor, partly due to a 1.7 billion writedown of a joint venture with struggling battery maker Northvolt.
Volvo Cars has taken over the entirety of what was a joint venture to build a giant battery factory for the manufacturer’s electric vehicles.
The automaker announced last September it was scrapping its goal set in 2021 of becoming fully electric by 2030, scaling back its target to between 90 and 100 percent.
