Volvo Cars experiences a black Friday after admitting to the market a roadmap with fewer sales in Asia (mainly in China), a drop in deliveries also in the US, and the need to lay off 2,500 workers to clean up the company's accounts. Its shares have plummeted by 30% on the Stockholm Stock Exchange. It is worth noting that the company belongs to the Chinese group Geely, who in 2021 decided to take the firm public for a valuation of around 19,000 million euros. Today its market capitalization is 3,800 million, 80% less.
The company has today released its third-quarter results, and the picture presented to investors clearly shows the situation: a sales drop of 11%; revenues decrease by 23% compared to the previous year; and operating cash flows (from its daily activities) and investments not only remain in the red but double. The CEO of Volvo Cars, Håkan Samuelsson's words during the analyst conference to present the figures have worsened the perception of the financial results.
"No one will succeed by following the old recipe of developing cars in Europe and selling them at a premium in China." Those times are gone" and won't return. Volvo Cars has announced the dismissal of 2,500 workers globally (6% of the workforce), with the vast majority (about 2,000) in Sweden, aiming to save an additional 5,000 million Swedish crowns (around 450 million euros) in indirect expenses and variable costs.
Specifically, these layoffs will be carried out through consultancy contract terminations, natural staff turnover, and the implementation of specific compensation plans for employees, along with other cost reduction programs that the company "has already successfully implemented," as explained by the publicly traded company, which will see the benefits of these layoffs starting in late 2027, reducing indirect expenses by 25%.
"In the short term, with very low sales volumes, we need to strengthen our recovery plan with additional decisive actions, reducing our breakeven point and improving cash flows to increase our resilience," stated Samuelsson.
Volvo Cars has achieved a net profit of 29,459 million Swedish crowns (2,651.31 million euros) in the first nine months of the previous year, representing a 17.4% increase in profits compared to the same period the previous year.
Revenues have increased to 356,563 million crowns (32,090.67 million euros), a 3% year-on-year increase compared to the first nine months of 2025, due to increases in Europe and South America and declines in North America and Asia.
The real conflict lies in Asia, where business has contracted by 29%, while in North America, the decline has been 3%. On the other hand, both in Europe and South America, revenue has grown by 8%, which is the positive part as it is their main market. Regarding retail sales, the company acknowledges a 38% drop in China in the first nine months; 15% in Germany, 11% in the US, another 3% drop in the Netherlands and Belgium; in their home country, Sweden, a 4% decrease, while holding steady with a 5% increase in the UK and another 6% in Spain, which is among their top ten markets.
In China, Volvo Cars and other traditional premium brands faced fierce competition from new Chinese alternatives, along with strong price pressure. As a result, Volvo Cars' revenues in China dropped by almost 50% year-on-year. In the US, Volvo Cars continued to suffer the negative effects of tariffs and the elimination of incentives for buying electric cars, negatively impacting their margins.