A third quarter loss of SEK763m (US$115m) before tax, although disappointing, is in line with expectations according to Volvo chief Stefan Jacoby.

He added that quarter three is known to be challenging in particular due to seasonality, but Volvo is gaining market shares.

Jacoby said: “There are concerns about consumer confidence given the turbulence of financial markets. At the same time I'm very pleased about the positive sales developments and the strength of our brand, and the outlook for 2011 remains positive."

Retail sales in the third quarter increased by 27.7% over the same period a year ago to 103,119 units and growth was recorded in all sales regions, with China demonstrating the largest increase, up 67.8% over 2010.

North America grew 19.9%, the Nordic region by 23.6% and Europe improved 20%.

In September, Volvo recorded a new all-time high with sales of nearly 42,000 units, making it the fastest growing premium car brand.

In the first nine months of 2011, Volvo has sold 333,865 vehicles (retail), an improvement of 22.5% compared to 2010, mainly driven by strong demand for the 60-series, with the all new S60 and V60 together with the XC60 crossover outperforming all other car lines.

Sales of the low-CO2 DRIVe models continued to improve. In Europe 29.4% of all sold Volvo cars in the third quarter carried the DRIVe badge.

XC90 sales grew by nearly 10% over 2010 in the third quarter, and the XC range now represents around 35% of total sales.