Volvo Cars to slash $1.87 billion in costs amid mounting price pressures, lower sales

Volvo Cars ( OTCPK:VLVOF ) ( OTCPK:VLVLY On Tuesday, they announced cost reductions totaling 18 billion Swedish crowns ($1.87 billion). Additionally, they removed their profit outlook for the coming two years, as they plan to reorganize their operations in the U.S.

The firm's operational profitability for the initial quarter decreased to 1.9 billion Swedish crowns from 4.7 billion crowns during the same period the previous year.

The cost-reduction strategy aims to achieve savings of 5 billion crowns through "indirect spending improvements," potentially involving layoffs. Most of the impacts from this initiative will become evident in 2026.

Volvo ( OTCPK:VLVOF ) ( OTCPK:VLVLY ), largely owned by China's Geely ( OTCPK:GELYF ) is now under the leadership of new CEO Hakan Samuelsson, who had been at the helm of Volvo for ten years before being brought back earlier this month following the dismissal of former CEO Jim Rowan.

In the first quarter, Volvo saw a 6% drop in retail sales, with revenue totaling SEK 82.9 billion, mainly because of reduced wholesaling volumes.

"Given the uncertainties surrounding macroeconomic, geopolitical, and market developments, as outlined earlier, 2025 is expected to be a challenging and transitional period for the company," stated the firm in an official release.

"As we enter into the year, we see that tougher market conditions and lower volumes combined with increased price pressure and tariff effects are impacting profitability."

Further information about AB Volvo (publicly traded company) and Volvo Car AB (also publicly listed).

• AB Volvo (publ) (VLVLY) Q1 2025 Financial Results Conference Call Transcript
• Volvo: Why The Gains Might Reach 2.5% Annually But No More
• Volvo Car AB (publ) (VLVOF) Q4 2024 Earnings Conference Call Transcript
• AB Volvo reported an earnings per share (EPS) under Generally Accepted Accounting Principles (GAAP) of SEK 4.86 and revenues totaling SEK 121.8 billion.
• Volvo plans to reduce up to 800 U.S. jobs due to tariff uncertainties.

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