Volvo Cars plans cost cuts as first-quarter profit drops

Sweden-based automaker Volvo Car Group (VOLCARb.ST) reported a smaller-than-expected fall in first-quarter operating earnings on Thursday and said while overall demand remained healthy it may still cut costs as the global economy slows down.

Volvo Cars, majority-owned by China’s Geely Holding, said operating earnings fell to 5.1 billion Swedish crowns ($494.63 million) in the quarter from a year-ago 6 billion crowns, beating a mean forecast of 3.6 billion crowns, according to Refinitiv estimates.

The automaker reaffirmed its outlook for “solid double-digit growth” in retail sales this year, provided there were no major supply disruptions.

While demand for the company’s cars was healthy, macroeconomic conditions were challenging, CEO Jim Rowan said.

“Given the long-term nature of the headwinds our industry is likely to face, we are also evaluating the need for further targeted cost actions that are sustainable over time and that will contribute to our growth,” Rowan said in a statement.

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