Geely-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 of China.
The carmaker will increase volume and cut operational costs to try to offset the impact on margins that is expected to persist this year, CEO Hakan Samuelsson told Reuters.
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"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."
Reuters said the company's 2018 operating profit increased 0.9% to 14.2bn Swedish crowns (US$1.5bn), but its margin fell to 5.6% from 6.7% a year ago.
The trade war caused Volvo to postpone plans for a listing last year and generated additional costs to retool its factories to limit the tariff impact.
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By GlobalDataSamuelsson said if the US followed through on its threat to slap tariffs on European cars, that would result in a "very severe" impact for Volvo and the broader European auto industry that would be difficult to offset.
