Volvo’s basic proposition that it will give you a big, safe, extremely comfortable car — that by the way, also costs a bit less than the German competitors — has always felt savvy, since there isn’t much point in challenging BMW or Mercedes on volume. It also works: Volvo had record profits in the second half of last year.
From the Financial Times on Wednesday:
Although full-year sales and profits dropped, the second-half performance was far better than the first.
For the second half of the year, the Geely-owned carmaker posted SKr9.5bn ($1.1bn) of operating profit and SKr151bn of sales, both records for any six-month period. Net income for the period was SKr9bn, 44 per cent higher than the same period in 2019.
The vehicle maker booked a 6.3 per cent profit margin for the second half, achieving a long-held aim of hitting comparable levels with its German rivals, Daimler and BMW.
“It was the best half year ever, we saw a very impressive comeback especially in China and the US,” Volvo Cars chief executive Hakan Samuelsson told the Financial Times.
Volvo wants to sell 800,000 cars globally this year, or more than double what it was selling 10 years ago when Geely bought Volvo from Ford for $1.8 billion, about 10 years after Ford had bought Volvo for $6.5 billion. I don’t know how much Volvo is worth now but I’d guess that Geely has been pretty happy with its purchase, and man, the Ford years just look worse and worse.
What has Geely done to be so successful? Not much, visibly, except leave people at Volvo alone to do what they do best.