STOCKHOLM – Volvo Cars reported a sharp decline in its second-quarter adjusted operating profit on Thursday, citing weak global demand and mounting pressure from international tariffs as key challenges.
The Sweden-based automaker posted an adjusted operating profit of 2.9 billion Swedish crowns ($297.89 million) for Q2, down significantly from 8.0 billion crowns in the same period last year — a drop of over 63%.
The results highlight the impact of macroeconomic headwinds, including slowing consumer demand and the rising cost of cross-border trade, particularly as tariff-related uncertainties weigh heavily on global supply chains.
While Volvo continues to invest in electrification and digital transformation, the short-term outlook remains cautious.
“Demand remains under pressure, and global trade dynamics continue to pose risks,” the company noted in its earnings release.
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The automotive sector globally is navigating a difficult environment as inflation, high interest rates, and geopolitical instability dampen consumer spending on high-ticket items like cars. For European automakers such as Volvo, exposure to global markets means currency fluctuations and tariff changes have an outsized effect on margins.
Investors and analysts will be closely watching how Volvo plans to restore profitability in the coming quarters, particularly as it ramps up production of electric vehicles and looks to strengthen its position in key markets.
