Volvo Car blames 'intensifying headwinds' for quarterly sales decline

(Sharecast News) - Shares in Volvo Car fell in Stockholm on Wednesday after the company reported a 5.5% year-on-year decline in sales between March and May.

The Gothenburg-based carmaker, which is majority owned by Chinese conglomerate Geely, reported sales of 178,980 for the three-month period, down from 189,440 the year before though ahead of the February to April quarter.

The decline was a result of a 12% drop in sales of mild hybrids and traditional internal combustion engine cars, which totalled 93,284 during the period.

That was only partially offset by a 3% increase in electrified models, with fully electric car sales up 10% at 41,435 and plug-in hybrid sales down 3% at 44,261. Electrified models now accounted for 47.9% of total cars sold during the period, up from 43.9% the year before.

Volvo Car said the wider auto industry continues to face "intensifying headwinds across regions", which was reflected in the most recent decline in overall sales. In particular, sales in China were weak due to a highly competitive industry landscape and challenging macro environment, it said.

"Despite all the external challenges, we continue to grow in Europe through electrification," said Erik Severinson, Volvo Car's chief commercial officer.

"Overall, deliveries of our fully electric cars grew for the eighth consecutive month driven by the strong demand for the EX30 and EX40 electric SUVs in Europe. We have also seen sustained and strong increase in retail orders for our fully electric models in the region, which further reinforces our strategy to become a leader in premium electrification."

Shares in Volvo Car AB were down 3.1% at SEK23.09 by 1314 BST.