File photo
Stockholm: Swedish carmaker Volvo Cars on Friday reported a drop in sales in the second quarter, noting a "very challenging environment," but said it expected sales to pick up in the second half of the year.
"The second quarter ends a turbulent first half of 2026. The China market weakened for us as well as for the whole industry, and global uncertainty resulting from the Middle East conflict increased," chief executive Hakan Samuelsson said in a comment.
For the period from April to June, Volvo Cars reported revenues of 77.7 billion kronor ($8.05 billion), down from 93.5 billion kronor a year earlier.
The number of vehicles sold dropped six percent to 171,500.
Net income came in at 417 million kronor, up from a net loss of 8.1 billion kronor, but the second quarter of 2025 was impacted by a 11.4-billion-kronor writedown of the value of its electric cars.
Samuelsson said that looking ahead, there were positive signs.
"After several months of sales decline, the US is showing signs of recovery with two consecutive months of growth in May and June," Samuelsson said, adding that Volvo Cars expected this recovery to continue.
Coupled with growth in Europe, Samuelsson said they expected "significantly stronger sales during the second half of the year as compared to the first half."
He also said that the company was making progress on cost-cutting actions, including "a reduced headcount of approximately 3,000 positions" compared to the first half of 2025.
Volvo Cars last year announced an 18-billion-kronor cost-cutting plan.
