Volvo Cars has reported a break-even result for 2012 with a full-year operating income of SEK18m (US$2.8m) despite economic uncertainty in Europe which significantly impacted sales and earnings. This compared with SEK2.2bn in 2011. Revenue of SEK124.5bn last year compared with SEK125.7bn in 2011.

The company said it focused in the second half of 2012 on “re-balancing its cost base around the new sales environment” while “continuing the long-term investments needed for the transformation process of the group”.

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President and CEO Håkan Samuelsson said: “We are in the midst of perhaps the most intense transformation in the group’s history. Despite a challenging market situation we continued to invest in important future technologies, such as Volvo engine architecture and scalable product architecture. [We also] managed our cost side effectively. This balance is vital as we build our future as a strong independent car manufacturer in the premium segment.”

Volvo said it expects high levels of competition in the car industry to continue this year as manufacturers seek to capture volumes and market shares which will put pressure on both volume and pricing.

Chinese and US markets are expected to grow on the back of increasing demand while the challenging economic environment will continue to affect European sales.

Samuelsson added: “Our strategy for 2013 is to retain market shares in the countries in which we operate by strengthening our presence in our segments but with even more precision than before.

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“The highly competitive climate is likely to continue in 2013 and, impacted by macro trends, we expect our sales in 2013 to be on par with last year. We are well-positioned to capture positive sales trends and new customers with an almost entirely renewed product range about to be launched.”