Volvo had a solid 2024, landing record sales numbers and profits, but the picture hasn’t been as rosy for the Chinese-owned Swedish automaker so far in 2025. Its first-quarter results showed massive drops in operating income, revenue, and sales, leading Volvo to shift its focus to cost-cutting to right the ship.
Volvo announced an effort to reduce costs by $1.87 billion, which will involve layoffs and cutting planned investments in things like EV development. Volvo Cars CEO Hakan Samuelsson said, “The automotive industry is in the middle of a very difficult period with challenges not seen before. Over the last few weeks, I have worked with the management team and other colleagues on a plan to make the company stronger and more resilient. While our strategy is clear, we must get better at delivering results.”
Much of the cost-cutting program’s effects will be felt in 2026, and Volvo withdrew its financial guidance for the next two years as it assesses the effort’s impacts. The automaker plans to shuffle its North American sales regions, creating a new market called Americas, which covers the U.S., Canada, and Latin America. The new area will gain a new CEO, as Luis Rezende will step up to take over for Mike Cottone, Volvo’s previous U.S. and Canada operations leader.
The company has a U.S. manufacturing presence, but it’s particularly susceptible to trade actions by the federal government. Many of its models and much of their underlying technologies are developed and built overseas, putting Volvo at risk as President Trump’s trade war progresses. That said, the President appears poised to give automakers a little relief.
[Images: Volvo]
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