INTERNATIONAL – Chinese-owned Volvo Cars reported a fall in 2018 profit margins as a prolonged trade war between Washington and Beijing pushed up costs and resulted in pricing pressure in its main market China.
The Swedish carmaker, owned by China’s Geely, will increase volumes and cut operational costs to try to offset the impact on margins that is expected to persist this year, chief executive Hakan Samuelsson told Reuters.
“We have a very, very strong product offering and a modest market share outside Sweden, so we are expecting and planning for further growth,” Samuelsson said.
“I would say we enter now into a phase where we have to focus more on the cost side as well - not with any special packages, but with normal work to improve our cost consciousness and cost control.”
In 2018, the Chinese premium car sales segment held up better than the broader market which contracted amid fallout from the trade war. Carmakers including Tesla cut prices in response, denting earnings.