Volvo Cars continues to make hefty profits on increased income, as new models sell well.

Volvo Cars, the premium car maker, reported an operating profit of SEK3.5 billion for the first three months of the year, up 11 per cent from SEK3.1 billion during the same period last year. The increase was mainly driven by strong demand for the company’s XC60 and 90 series cars. 

Volvo Cars reported an operating profit margin of 7.3 per cent, down from 7.5 per cent last year. Profitability was partly offset by costs related to the launch of the new 90 series cars and the new XC60, as well as continuous investments in new technologies and a rising number of employees. Since the first quarter of 2016, Volvo Cars has welcomed almost 5,000 new employees, bringing the total global workforce to 33,000.

Global retail sales increased by 7.1 per cent to 129,148 cars in the January-to-March period, resulting in a first quarter revenue of SEK47.6 billion, up 13 per cent from SEK42.0 billion last year.

“In the first three months we have seen strong demand for our 90 series cars as they reached markets worldwide,” said Håkan Samuelsson, president and chief executive of Volvo Cars. “We also unveiled the new XC60 in the first quarter and we expect this car to have a positive impact on sales and profitability.” 

In March, Volvo Cars unveiled the new XC60 model at the Geneva Motor Show, which was received to great acclaim. Later this year, Volvo Cars will launch the XC40, based on the new CMA small vehicle platform, positioning the company for further growth in the fast-growing SUV segment.

Key figures	Q1 2017	Q1 2016
Net revenue, MSEK	47,592	42,027
Operating income, EBIT, MSEK	3,491	3,145
EBIT margin, %	7.3	7.5
Net income, MSEK	2,606	2,069
Cash flow from operating and investing activities, MSEK	-2,304	-323

The Asia Pacific region reported sales growth of 16 per cent in the first quarter to 32,872 cars, boosted by a strong performance in China, Volvo Cars’ largest market. There, sales rose by 18.8 per cent to 23,335 cars, following strong demand for the locally produced XC60 and S60L models, as well as the XC90 and S90.

Sales in the EMEA region increased by 9.2 per cent to 78,820 cars sold, on the back of a strong performance in Sweden, the United Kingdom and Germany. The region continued to see strong demand for the new V90 and XC90, as well as Europe’s most popular premium mid-size SUV, the XC60.

The Americas region reported sales of 16,641 cars, of which 13,476 were in the United States. The XC90 remained the best-selling model in the Americas.