STOCKHOLM: Geely-owned automaker Volvo Car Group reported its operating earnings tripled in the first half and said a further roll-out of new, more up-market models left it confident about reaching record sales and earnings for the full year.
Bought by China's Zhejiang Geely Holding Group Co. from Ford Motor Co. in 2010, Volvo said operating earnings rose to 5.59 billion Swedish crowns ($649.8 million) from 1.66 billion.
One of Sweden's biggest companies by sales and staff numbers, Volvo is banking on a 75 billion crown investment plan in new models and plants to secure a foothold in a premium market where it had struggled to make inroads under Ford's tutelage.
Gothenburg-based Volvo saw sales rise to 83.65 billion crowns from 75.22 billion a year ago underpinned by strong demand for its flagship XC90 SUV.
It said the launch of its S90 sedan and V90 estate would provide a boost in the second half.
"This robust first half financial and operational performance combined with a positive product pipeline allows me to state confidently that Volvo Cars expects to report another record full year in 2016 in terms of sales and profitability," Volvo Chief Executive Hakan Samuelsson said in a statement.
Samuelsson gave an upbeat outlook for auto markets in the second half after Volvo, which competes with larger rivals such as Daimler's Mercedes-Benz and BMW, grew unit sales by 10.5 percent in the first six months of 2016.
"We are positive about the development in the US as well as in Europe, where we are both taking market share and have a strong underlying market which after many years is finally coming back," Samuelsson told Reuters.
"In China, above all in the premium segment, we expect further steady growth."
Launch costs for the new S90 and V90 models meant Volvo's operating margin dipped relative to that reported for the first quarter, but it still stood at 6.7 percent versus the 2.2 percent posted in the first half of last year.
Samuelsson said costs related to the launches would continue to have an impact in the third quarter.
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