Ford's Volvo Sees Profit Growth Slowed by Weak Auto Demand - Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars
LinkBack Thread Tools Display Modes
post #1 of 1 (permalink) Old 06-27-02, 08:14 AM Thread Starter
Mr. Embargo
Join Date: May 2001
Location: Embargoland
Posts: 3,745
Ford's Volvo Sees Profit Growth Slowed by Weak Auto Demand

By Brian Lysaght

London, June 26 (Bloomberg) -- Ford Motor Co.'s Volvo luxury car unit said increasing profit will be difficult this year because of weak demand in the U.S. and Germany.

``We managed'' to increase earnings ``in the first quarter ``but it was a big challenge,'' Chief Executive Hans-Olov Olsson said in an interview. ``We have not lived up to expectations in the U.S.'' and the German market ``is terrible.'' Ford doesn't break out Volvo results.

Ford, which had a loss of $5.45 billion last year, hasn't reduced investment at Volvo, said Olsson. It will spend about $3.7 billion in the next three years to expand its factories and add new models. Volvo wants to increase sales to 600,000 annually from 420,000 cars last year by adding a sport utility vehicle and smaller cars.

Its U.S. sales fell 15 percent to 43,013 cars in the first five months, while Western European sales fell 2.3 percent to 101,935 cars. In the U.S., it's decided not to match rival automakers' discounts to keep up profit and resale value of cars, Olsson said.

The company is hoping for sales growth in the second half because of increased availability of diesel engines in Europe and the introduction of the $40,000 sport-utility, the XC90, in the U.S. in the fourth quarter, he said.

``We aim for marginal improvement in profit, turnover and volume this year,'' said Olsson, who spoke at an Automotive News Europe Conference this week.

Despite parent company Ford's losses, it hasn't cut funding to expand Volvo's product line, Olsson said. Volvo spends 6 percent, or about $780 million, of its $13 billion in annual revenue on product development, the company said.

In addition, Ford is spending $1.3 billion over three years to expand Volvo's assembly plants at Ghent, Belgium and Gothenburg, Sweden. Capacity will rise to 500,000 cars annually in 2005 from 310,000 cars currently. It will hire 500 more workers over three years.

Ford isn't considering the sale of Volvo, Olsson said, responding to a Swedish newspaper report that workers are concerned about a possible sale.

RPO83 is offline  
Sponsored Links

  Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars > Fordforums Community > Latest Ford News and Racing News > Ford Worldwide News
Gear in this thread - Powered by O'Reilly Auto Parts

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode

Similar Threads
Thread Thread Starter Forum Replies Last Post
A CENTURY OF VISION: Fords built city, changed the world Stacy94PGT Ford Worldwide News 0 03-12-03 08:17 AM
The pressure from Ford has begun to irritate Volvo Stacy94PGT Ford Worldwide News 0 02-24-03 08:32 AM
News from the North American Dealer Assoc. Stacy94PGT Ford Worldwide News 2 01-31-03 03:34 PM
Volvo rounds the corner to a new styling direction Stacy94PGT Ford Worldwide News 1 06-25-02 09:44 AM
75 Years of Volvo Cars RPO83 Volvo 2 04-09-02 02:16 AM

Posting Rules  
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

For the best viewing experience please update your browser to Google Chrome