STOCKHOLM: Sweden-based Volvo Cars reported a small rise in third-quarter operating profit before items affecting comparability on Thursday but said pricing competition and effects of U.S. import tariffs continue to weigh.
The group, which is majority-owned by China’s Geely Holding, said operating profit before items affecting comparability, such as restructuring costs, was 5.9 billion Swedish crowns ($626.6 million)against a year-earlier 5.8 billion.
Net sales as well as retail sales fell 7%.
“Our performance continued to be under pressure due to a shrinking total premium market and tough competition, especially in the fully electric segment,” CEO Hakan Samuelsson said in a statement.
Volvo Cars is one of the European carmakers worst-positioned against U.S tariffs as it exports most of its U.S.-bound cars from Europe. It has however recently taken steps to move production of some hybrids to America over the next few years.
The gross margin – a key metric for assessing the impact from trade tariffs – was 20.4% compared with a year-ago 20.5% and 17.7% in the second quarter.
