Geely’s Volvo Cars expects record sales in 2016 for the third consecutive year, president and chief executive Håkan Samuelsson said. He also forecast operating profits would improve in 2016, due to growth in the three main sales regions of China, Europe and the US.
The forecast came after Volvo said it trebled operating profit in 2015 to SEK6.6bn, up from SEK2.13bn in 2014, while revenues for the year hit SEK164bn compared with SEK137.6bn in 2014.
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The automaker said it set a sales record of 503,127 cars in 2015, the first time it has sold more than half a million cars in a year in its 89-year history.
Sales were boosted by the introduction of new 90 series cars and strong sales of older models. It also reported record sales for 2014 of 466,000 cars.
Currently working on complete renewal of its product range, Volvo is aiming to almost double sales to around 800,000 cars a year “in the medium term”.
Production of the new XC90 started and the end-of-year order intake of more than 88,000 XC90s far surpassed initial targets for the model. The start of production also meant the introduction of a third shift at the Torslanda plant in Sweden and more than 1,500 new manufacturing jobs.
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By GlobalDataIn the first half of the year, Volvo also incorporated its three joint-venture operations in China, thereby taking control of the operations.
In the second half of the year, construction started on Volvo’s new manufacturing facility in South Carolina in the United States. The facility represents an investment of around USD500m and will be operational as of 2018. The new plant means Volvo will be able to build and sell cars in each of its three core regions, highlighting its global aspirations.
“Volvo has made significant progress during the past year as it starts to reap the fruits of an ongoing SEK75bn investment programme,” IHS Automotive analyst Ian Fletcher said in a research note.
“The reception of the XC90 has been greater than many had expected which has helped this lift, and according to the company it has now so far received 88,000 orders for this model. This, alongside the popularity of its other crossover model, the XC60, has gone some way to help lift its unit sales performance during the year.
“This is despite a flatter performance in China which came about as demand slipped during mid-year as passenger car sales eased off significantly for a short period.”
