February 8, 2018 / 5:01 AM / 2 years ago

Record profit for Geely's Volvo in 2017 as China boosts sales

STOCKHOLM, Feb 8 (Reuters) - Operating earnings at Sweden’s Volvo Car Group leapt 28 percent to a record high last year as the Chinese-owned automaker saw strong demand for a string of new models, above all in China.

Volvo Cars, bought by Zhejiang Geely Holding Group in 2010, also reported its fourth straight year of record sales as a revamped, pricier model line-up helped it take on larger rivals such as Daimler’s Mercedes-Benz.

The Gothenburg-based company said operating earnings rose to 14.1 billion Swedish crowns ($1.76 billion) from 11.0 billion in 2016, as revenues climbed 17 percent to 210.9 billion crowns.

“Our business has transformed completely since 2010 and we are now gearing up for a phase of global, sustainable growth,” Chief Executive Hakan Samuelsson said in a statement.

After languishing for years under the Ford Motor Co umbrella, Volvo Cars has found a new lease of life under Geely’s ownership, investing in a broad overhaul of its models and making rapid inroads the world’s biggest auto market, China.

In recent months, Geely has been spreading its net wider, striking a deal to buy an 8 percent stake in truck maker AB Volvo, once the owner of Volvo Cars.

It has also bought shares in Daimler in the hopes of forging an alliance over electric cars technology, sources have told Reuters.

The implications for Volvo Cars are unclear, but the automaker has taken steps towards an eventual listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares just over a year ago.

The company has set a goal of reaching sales of 800,000 cars within the next few years.

It sold 571,577 Volvos last year, up 7 percent from 2016, boosted by demand in China, its biggest market, and brisk sales of its new 90-series station wagons and sedans and XC60 SUV.

$1 = 7.9923 Swedish crowns Reporting by Niklas Pollard; Editing by Mark Potter

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