Volvo expects record revenue, car sales in 2024

Boosted by the launches of the EX30 and EX90 EVs, Volvo expects to set new records for revenue and vehicle sales in 2024.

"With the foundations we built in 2023 and the new cars that we are bringing in 2024, we will have another record revenue year in '24," CEO Jim Rowan told Automotive News Europe.

Volvo on Thursday announced that in 2023 it set a new high for full-year revenue of 399 billion crowns ($38 billion), which was a 21 percent increase on 2022.

Rowan expects the automaker to top that figure this year and he set an even loftier target for Volvo: increase revenue to 550 to 600 billion crowns (about $49 to $53 billion) by 2026.

Looming sales surge

When it comes to vehicle sales, Rowan expects Volvo to increase it volume by more than 15 percent compared with last year's record total of 708,716. That would result in an increase of more than 110,000 sales, pushing Volvo's global total well above the 800,000 threshold for the first time.

Volvo had previous targeted reaching 800,000 sales by 2020, but the pandemic, chip shortage and supply chain crisis upended those plans.

"I'm confident we'll be above 15 percent by the simple virtue that we have the EX30 coming into full production," Rowan said.

Volvo's high expectations for its smallest, most affordable model are underpinned by strong demand.

The automaker said Thursday that 40,000 EX30s are in transit from China to locations that include Europe, Japan, the U.S. and Latin America.

Volvo started deliveries of the full-electric small SUV this week in Europe after a two-week delay caused by a software issue.

It is the second Volvo to be stung by software issues after the EX90. Rowan said production of the EX90 would start in the second quarter at the automaker's U.S. factory in South Carolina.

Customers in Japan will start getting the EX30 next week, while deliveries to car buyers in the U.S. and Latin America are scheduled for the summer, Volvo Deputy CEO Bjorn Annwall said.

New top-seller?

When asked whether the EX30 would pass the XC60 midsize SUV as Volvo's global top-seller this year Annwall said it wasn't out of the question.

"It has the chance to be up there with the big boys," said Annwall, who is Volvo'schief commercial officer, "but it will be difficult since it is just starting to be delivered in Europe and Japan now and it won't start reaching customers in the U.S. and Latin America until summer. But with a full calendar year of sales [in 2025], let's see."

In addition, Rowan said Volvo aims to start production of the EX30 before year-end at the automaker's factory in Ghent, Belgium, which would reduce waiting times for the vehicle. In the key German market, Volvo's consumer website says that it will take 12 to 14 months to get the EX30. That is because the 2024 allotment for the SUV is sold out.

"How many cars we will produce in Ghent this year is yet to be decided," he said. "There are a lot of moving parts when it comes to that in terms of localizing the supply chain."

Record profit

Volvo on Thursday also said it set an earnings record in 2023, with operating income of 25.6 billion crowns. That was an increase of 43 percent compared with 2022. Volvo's operating margin excluding JVs and associates was 6.4 percent last year, up from 5.4 percent in 2022.

Rowan said Volvo's goal is to boost its operating margin to more than 8 percent by 2026.

Previous, Volvo said it aimed to consistently achieve an 8 to 10 percent profit margin in the midterm. Rowan said putting a deadline on the target would provide clarity to the markets for the publicly traded company, which last month recorded its lowest share price since its listing in October 2021.

The automaker's share closed trading on Jan. 19 at 25.80 crowns ($2.47).

The stock was trading at around 35 crowns on Thursday afternoon after starting the day at 32.40 crowns.

Volvo said on Thursday it would no longer fund sister brand Polestar.