Volvo profits fall across all sectors
Volvo’s profits fell significantly in the first quarter of 2025, with sales dropping sharply. Demand fell across all product lines and in all major markets. Analysts attribute these trends to the impact of the new US tariff policy. This has caused uncertainty and put pressure on global trade.
According to official figures, Volvo’s financial performance deteriorated significantly in early 2025:
– net profit fell to €910 million, down from €1.29 billion the previous year;
– net sales fell by 7% to €11.15 billion;
– car sales were down 9%;
– service sales fell by 1%;
– operating margin was around 11%;
– earnings per share fell to 44 euro cents.
Despite the decline, the company recorded a 13% increase in truck orders, thanks to a recovery in European demand. However, deliveries fell by 12%, and overall shipments decreased by 18%. The European market remains key for Volvo. The company’s share of the heavy truck segment in the region reached a record high of 20%.. The volume of orders from Europe grew by 25%.
Volvo expects European demand to continue growing due to increased defence spending under the new EU policy. According to the company, this will create additional opportunities in the specialised and military supply segment.
Activity in the North American market has fallen compared to figures from 2024. The decline in demand is due to changes in the tariff system. New emission control legislation is also putting pressure on the market. These factors have caused American customers to slow down their decision-making processes.
Volvo President Martin Lundstedt believes that it is too early to assess the impact of the new tariffs. However, the company is actively working to optimise its supply chains. This will help adapt flows and production capacities to current market conditions. It is also important to review commercial processes in order to mitigate the pressure that the tariffs put on the market.
Cost optimisation
The decline in profits has forced Volvo to implement an anti-crisis programme. One of the first steps was to reduce staff numbers at its three US facilities. Within three months, Volvo had laid off around 800 employees. The company employs around 20,000 people in its American enterprises.
While the scale of the cuts cannot be described as critical, they emphasise the pressures that Volvo is facing in the US market. The Trump administration’s harsh tariff policies have increased production costs. This has made Volvo’s products less competitive in the region.
