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Volvo Cars expects sales and profits throughout the second half of the year to return to pre-pandemic levels, in one of the most bullish recovery predictions of any global carmaker.
The Swedish auto group fell to a loss in the first six months as car sales tumbled by a fifth, but has seen China recover and sales in all markets in July rise to “slightly above” the previous year’s figures.
“I think we could really see the business effects of the pandemic confined to the first six months,” chief executive Hakan Samuelsson told the FT.
“We do not need a miraculous recovery, just that the trends we have seen will continue,” he said. “We don’t see a second wave coming.”
However, the company’s attempts to list its shares on public markets by merging with Geely Auto have been delayed by the pandemic, with the deal placed “on hold”. Geely is waiting for regulatory approval to place its shares on Shanghai’s new technology index.
Global car sales have been dented by the outbreak, with factories and showrooms closed for weeks on end and consumer confidence knocked by the economic fallout of coronavirus.
Many carmakers have warned against expecting a full recovery until next year or even later, as key markets such as Europe take longer to return to normal.
The overall car markets in China and the US fell by a quarter in the six months, while in Europe they dropped 38 per cent.
Volvo’s sales fell 20 per cent to 270,000 cars, with the brand gaining market share in China where it “made up much of the ground lost in the first quarter”.
Sales of its Recharge plug-in hybrid models also rose by three-quarters in the six months, accounting for a quarter of all Volvo sales in Europe and one in 10 models in the US.
Net income, which was SKr3.4bn (£300m) in the first half of 2019, fell to a SKr1.2bn (£105m) loss after revenues slid 14 per cent to SKr111.8bn (£9.8bn).
The business opened a new SKr10.7bn (£942m) credit line in the six months, and cut 1,300 white-collar jobs in Sweden to shore up its finances and reduce running costs.
Ceasing merger talks with Geely was a technical requirement while the company sought clearance for its additional listing, Mr Samuelsson said, adding he expected talks to restart in the second half of the year.
Geely Auto is controlled by the Geely holding company, which owns Volvo Cars outright as well as a stable of automotive brands that include Lotus, Proton and the black taxi-maker LEVC.
The merger talks come two years after Volvo Cars abandoned plans to IPO its own shares.
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