STOCKHOLM — Volvo reported an 18 percent rise in fourth-quarter operating profit as cost cuts and growing sales more than offset the impact of subdued global auto markets.
The automaker, which China’s Geely acquired from Ford in 2010, said its operating earnings were 5.29 billion Swedish crowns ($551.7 million) as revenues rose 8.4 percent to 79.2 billion crowns ($8.3 billion).
Sales of Volvos rose nearly 10 percent in 2019 – with growth of 23 percent in the fourth quarter alone – as increases in China and the United States and strong demand for a line of crossovers, its best-selling models, gave a boost.
“During the second half of the year, and specifically during the fourth quarter, both profit and profit margin outperformed the comparative period in 2018,” CEO Hakan Samuelsson said.
“This is a result of continued strong growth in volume, especially in SUVs, as well as cost-efficiency measurements initiated early in 2019.”
Automakers have been under pressure over the past year, contending with heavy investment needs in the electric and self-driving technology that is seen reshaping the industry in the years to come, as well as softer demand in many major markets.
While Volvo has also faced higher capital spending needs, which it has sought to offset with 2 billion crowns of cost cuts, its niche position in the premium market and continued expansion in China have left it fairly unscathed by a broader slump in car sales.