Volvo posted a $1.47 billion pre-tax loss (1.15 billion) for 2008 last week, further complicating Ford Motors attempts to sell the Swedish brand.
In the fourth quarter, Volvos loss was $736 million as revenue skidded from $5.1 billion to $3.1 billion.
Ford hopes to sell Volvo for between $5 and $10 billion -- figures unlikely to be achieved because of the global recession and Volvos losses.
Volvo once was a jewel in Fords crown, earning a stable 500 million a year, according to insiders. But the global downturn, exchange rate difficulties and declining sales in key markets have combined to turn the company into a loss maker.
Volvos global sales fell to 359,000 units in 2008 from 482,000. The company once had a target of 600,000 units.
To counter the sales free-fall, Volvo will almost halve production in 2009.
It has already cut 6,000 jobs, to take its workforce down to 20,000, but has ruled out further cuts for now.
There has been reported interest in the company from Chinese automakers, who would mostly be interested in Volvos safety technology, as well as the global prestige of the Swedish brand. But the latest losses likely will drive down any offering price.
Volvo hopes it has done enough, but may have to review its costs again if sales do not increase, said spokesperson Maria Bohlin.
Mikael Sallstrom, head of Volvos union, said the results underscored the gravity of the companys problems. With these kinds of figures, you cannot live in the long run, he said. Everyone is very concerned about the future.