* Sees growth outlook favourable in all main markets
* Repeats will grow sales by 5 pct in 2014
* Says will take years to rebuild U.S. market position
* FY2013 operating profit 1.92 bln SEK vs year-ago 66 mln
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, March 21 With cost cutting boosting
profits last year, Swedish car firm Volvo is looking forward to
all its main markets growing in 2014, especially in Chinese
owner Zhejiang Geely Holding Group's home market, it
said on Friday.
The company, one of Sweden's biggest by sales and number of
employees, is banking on strong sales of increasingly
locally-made Volvos in China to reach a target of roughly
doubling sales by 2020 and securing its future in a cut-throat
"We for the first time in many years have positive outlooks
really for all our main market blocks," Chief Executive Hakan
Samuelsson said, pointing to growth in China and the United
States and a long-awaited if modest pick-up in European markets.
The Gothenburg-based company earlier reported operating
profits last year rose to 1.92 billion Swedish crowns ($302
million) from 66 million in 2012 when one-off gains from the
sale of technology to its Geely helped keep the carmaker in the
The sharp rise in earnings came despite Volvo having posted
a 577 million loss in the first half and full-year revenue
slipping to 122.25 billion crowns from 124.55 billion in 2012.
Volvo, bought by China's Zhejiang Geely Holding Group Co.
from Ford Motor Co. in 2010, stood by a forecast to remain
in the black this year and grow sales by "a good" 5 percent from
the 427,840 cars sold in 2013.
China has become a bright spot for Volvo as it seeks to take
on larger global luxury brands such as BMW, Daimler's
Mercedes and Volkswagen's Audi and
generate volumes sufficient to foot the bill for billions
dollars of investment in new vehicles.
Volvo's sales in China shot up nearly 50 percent last year,
leaving it the group's top market alongside the United States,
and it expects new models and a further expansion of its dealer
network in the world's biggest car market to underpin growth.
But while turnover in China has taken off, a lack of new
models has left Volvo unable to take advantage of a growing
total U.S. market with sales there sliding 10 percent last year
to 61,233 cars, roughly half of what they were a decade ago.
Acknowledging disappointment with its performance Volvo has
replaced top management in North America and hopes that a
sprucing up of existing models and a launch of its V60 sports
wagon will revive sales in the fiercely competitive U.S. market.
Samuelsson said a stronger model line-up, which will
eventually include a new XC90 SUV, and a doubling in its
marketing spend would go some way towards enthusing dealers and
showing its commitment to the U.S. market.
"We need to get back above 100,000 (cars) as soon as
possible to be relevant as a brand and for the dealers," he told
Reuters on the sidelines of the briefing.
"But that probably requires that the new XC90 is on board
and helping us. So we will probably have to wait a couple of
years, until 2016, before we manage that."
Volvo has for decades been hampered by periodically strong
currency headwinds in times of dollar weakness against the euro
and Swedish crown as it ships all cars sold in the United States
from its factories in Europe.
With the focus squarely on China, local U.S. production
looks distant but Samuelsson said the group was eyeing "concrete
opportunities" to eventually ship Chinese-made Volvos to the
United States due to the yuan being more closely linked to the
dollar than currencies in Europe.
"Instead of crossing the Atlantic we can cross the Pacific
Ocean. Toyota and Kia have moved a lot of cars across that ocean
over the years," he told Reuters.
(Editing by Alistair Scrutton and Greg Mahlich)