Volvo Cars announced plans on Oct. 23 to eliminate approximately 2,500 more positions worldwide after its third quarter revenue in China nearly halved and the Swedish automaker swung to a steep operating loss.
Shares of the company, which is controlled by China’s Zhejiang Geely Holding Group, plunged 24.2 percent on the Stockholm stock exchange on Oct. 23, closing at 10.70 Swedish kronor (about $1.08) after touching a record low during trading.
Volvo reported an operating loss of 5.6 billion Swedish kronor (about $563 million) for the July–September quarter, compared with a profit of 6.4 billion kronor (about $644 million) a year earlier. Global revenue fell 23 percent to 66.9 billion kronor (about $6.73 billion), while free cash outflow more than doubled, from 4.3 billion kronor (about $432 million) to 8.9 billion kronor (about $895 million).
The latest restructuring calls for approximately 2,000 job reductions in Sweden and 500 elsewhere. Volvo said the measures would include ending consultant contracts, natural attrition, and targeted exit packages for employees.
Asked by The Epoch Times how many of the planned reductions would affect existing employees rather than consultants, and how many positions would be eliminated in China, Volvo Cars declined to provide a breakdown.
The company aims to save an additional 5 billion kronor (about $503 million) by the end of 2027. The latest reductions follow approximately 3,000 job cuts announced last year.
“We need to reinforce our turnaround plan with additional decisive actions,” president and CEO Hakan Samuelsson said in the company’s earnings announcement.
Chinese Competition Squeezes Volvo
China was among Volvo’s hardest-hit markets, with revenue falling almost 50 percent from a year earlier as domestic Chinese automakers intensified competition through lower prices and new vehicle technologies.
The company said intense pricing pressure from newer Chinese manufacturers contributed to the decline, particularly in China’s premium automobile market.
Volvo, headquartered in Gothenburg, Sweden, has been under Chinese ownership since Geely acquired it from Ford Motor Co. in 2010. Geely currently controls nearly 79 percent of the publicly traded automaker.
Faced with declining sales in China, Volvo plans to expand cooperation with Geely on vehicle development, production, and purchasing.
The company plans to introduce six vehicles designed specifically for the Chinese market, with the first two expected to begin production in mid-2027. The vehicles will be developed using Chinese technology systems, including advanced driver-assistance systems, Volvo said.
In Shanghai, the company intends to combine two offices by relocating its sales operations to its regional headquarters in Jiading.
Volvo is also considering producing vehicles from multiple Geely brands at its existing plants in Chengdu, China, and Ghent, Belgium. It plans to expand its common supplier base with Geely and increase the use of shared vehicle hardware.
Asked by The Epoch Times whether the expanded cooperation with Geely would affect vehicles sold in the United States and Europe, Volvo Cars said its upcoming vehicles would use separate technology systems for China and Western markets.
“As part of our regionalised product strategy, all our upcoming cars will be based on a dedicated and separate tech stacks for China and the Western markets,” Volvo told The Epoch Times in an Oct. 23 email.
US Tariffs Add to Pressures
Volvo also faced pressure in the United States, where tariffs increased the cost of importing vehicles and the expiration of federal electric-vehicle incentives weakened demand.
The company said both developments hurt its profit margins. Higher import costs have added pressure on automakers such as Volvo, which manufacture many of their U.S.-bound vehicles overseas.
Federal tax credits for qualifying electric vehicles expired for vehicles acquired after Sept. 30, 2025.
Changes to U.S. fuel-economy rules also cost Volvo about $111 million in third-quarter earnings. The company had accumulated regulatory credits it could sell to other automakers, but the Trump administration’s relaxation of fuel-economy standards reduced demand for those credits, forcing Volvo to write down their value.
Other factors affecting Volvo’s third-quarter earnings included higher raw-material costs and a 900 million kronor (about $91 million) loss associated with its investment in Polestar, a separately listed electric-vehicle maker in which Volvo owns a minority stake.
Even as its global business weakened, fully electric vehicles accounted for 32 percent of Volvo’s third-quarter vehicle sales, up from 22 percent a year earlier.
Volvo is also shifting more production to the United States. It plans to begin building its XC60 SUV at its Charleston, South Carolina, factory in the first quarter of 2027, followed by another new model offering multiple powertrain options before the end of the decade.
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