Volvo CEO: ‘We have no intention to pay EU fines’
Volvo CEO, Hakan Samuelsson, was in Brussels on Thursday to comment on the good results of the Swedish/Chinese car manufacturer last year. The Ghent factory is playing a major part in these positive evolutions.
In 2019, Volvo sold 705.000 cars (+9,8%), (first time more than 700.000), and turnover increased with 8,5% to 26 billion euros. Operational profit rose to 1,36 billion euros (+0,8%). Some 1.181 FTE were ended last year, mostly external jobs, and indirect activities, leaving 45.233 persons employed worldwide.
“For the 6th consecutive year, 2019 was again a year of growth, also thanks to the savings we did in the second half-year. Productivity has been far better; we made more cars with fewer people on the payroll,” declared Samuelsson.
Market share up everywhere
Volvo gained market share all over the world last year. In China, Volvo sold almost 155.000 cars (+18,1%), the highest volume ever on a single market. In the US, 108.234 Volvo models were bought (+10,1%); in Europe, big markets like Germany and the UK were also breaking records.
In Belgium, sales went up by 5,7% to a total of 21.302 cars. One out of five was already a hybrid, while during the last Brussels Motor Show in January, 40% of the offers made by the Volvo informants concerned hybrid propulsion.
In Europe, Volvo wants to sell at least 20% hybrids. If this can be realized, the manufacturer doesn’t have to fear the huge EU fines for trespassing the average CO2 emission barrier of 95 g/km.
“We definitely have no intention of paying fines to Europe,” added Belgian Carla De Geyseleer, the new Volvo CFO. At the end of 2025, Volvo wants its C02-footprint reduced by 40%.
For 2020, Volvo expects further growth and a better profit margin (which fell from 5,8 to 5,2%). But Samuelsson finds it difficult to give concrete figures because of uncertainties like the coronavirus (with big impact in China) and the Brexit.
Samuelsson thinks that there will be a free-trade agreement and that the UK will stick to the EU type approvals for cars. “The contrary would surprise me; it would be disastrous for the British consumer,” Samuelsson adds.
Ghent as an example
Samuelsson is also pleased with what happened in Ghent. “We always believed in Ghent and are very happy about it,” Samuelsson continued.”But we will have to stay focused on cost, quality, and productivity. We have the same problems in Sweden, by the way. It’s a permanent challenge, but we’ve proved it can be done.”
From the new ‘small platform’ cars to be built in Ghent, the success of the compact XC40 SUV is overwhelming. At the end of the year, there will also be a fully electric version (XC40 Recharge), and Volvo expects to produce ‘considerable volumes’ of it next year.
Asked about the capacity of the Ghent factory, Samuelsson answered “that an additional model would be possible, but that the surplus capacity is fairly limited. Our next step will be to reach full capacity at our production sites in the US and China.”
Some time ago, there were plans to build other products from the Geely group, like models from Lynk & Co and Polestar, in Ghent, but those plans have been abandoned. Ghent has a full job managing the XC40 success.