Every cost category at Volvo rose in 1997, said Volvo Chief Executive Leif Johansson. The cost of sales rose 14.5 percent in the first quarter, he said.
Johansson said the only way the company can get higher profit margins is to cut costs. Intense market competition keeps prices from rising, he said.
Volvo Group net income plunged 65 percent the first quarter of the year, despite a sales increase. Earnings totaled 1.58 billion crowns ($200 million), compared to 4.50 billion the year ago period. However last year's numbers included a capital gain of 3.03 billion.