Geely-owned Volvo Cars has posted Q1 earnings gains boosted by strong sales of its recently launched and high margin XC90.

The company said that operating profit for the first three months of the year increased strongly to SEK 3.1bn (versus a year-ago loss of SEK 11m) and the operating profit margin reaching 7.5%, as sales improved in Europe, Asia and the US.

The Swedish company reported that global retail sales between January and March rose 11.9% to 120,591 units, while net revenue increased to SEK41.7bn, up an impressive 24% compared to last year.

Volvo said the revenue and profit increase was driven primarily by volume and sales mix, specifically the margin enhancing effects of the new XC90 SUV, sales of which hit 20,800 in the first three months of the year.

 “The new XC90 proves that customers like what they see from the transformed Volvo Cars – one in five new Volvo cars sold in the first quarter was an XC90,” said Håkan Samuelsson, president and chief executive. “We also unveiled the new S90 sedan and V90 estate in the first quarter and we expect these cars to have a similar positive impact on sales.”

In Western Europe the company continued its strong performance and reported retail sales of 49,305 units, an increase of 13.3%, during the first quarter. Germany, UK, Spain and France were the main drivers behind the positive development, Volvo said.

The company also saw an increase of 13.4% to retail sales in China (19,636 units). The XC60 was Volvo’s top selling model in China with retail sales of 8,794.

In Sweden, previous strong sales trends continued, selling 16,047 (14,093) units and recording an increase of 13.9%.

In the US, sales rose 19.2% compared to the same period last year to 16,361 units.

“We anticipate the full-year retail sales to increase. The XC90 will, with a whole year of production, be a main driver. During the latter part of the year the start of production of the S90 and the V90 will also contribute to the increased sales. Based on the volume increase, albeit influenced by launch costs for the new models reaching markets during the year, we anticipate our full year net revenue and operating income to increase year over year,” said Håkan Samuelsson.