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Geely's Volvo Cars sees wider market recovery on solid growth in China
[STOCKHOLM] Volvo Cars said on Tuesday it expects its business to recover in the second half of the year, even as the automaker reported an operating loss for the January-June period.
The Gothenburg-based company, owned by China's Geely Holding, has been hit hard by the pandemic that has temporarily closed plants and strained supply chains in the industry, with lockdowns in many key markets and transport hubs.
Volvo said it had seen a return to solid growth in China during the second quarter, and is expecting a similar upturn in the United States and Europe.
"If the market recovers as we expect, we anticipate sales volumes to return to the levels we saw in the second half of 2019 and it is also our ambition to return to similar profit levels and cash flow," chief executive officer Hakan Samuelsson said in a statement.
Market recovery has allowed the company to resume production in all factories, except the Charleston plant in Ridgeville, South Carolina, Volvo said.
The carmaker, which Geely acquired from Ford Motor in 2010, reported an operating loss of 989 million Swedish crowns (S$152.6 million), versus a 5.52 billion crown profit last year, as revenues fell 14 per cent to 111.8 billion crowns.
The firm had warned in March that sales, earnings and cash flow in the first half of 2020 would decline from a year ago as the coronavirus pandemic weighed on its business.