September 5, 2012 / 8:45 AM / 8 years ago

Geely's Volvo Cars sees profit crash in H1

STOCKHOLM, Sept 5 (Reuters) - Swedish carmaker Volvo, owned by Chinese Zhejiang Geely, said on Wednesday its operating profit fell 84 percent in the first half of 2012 versus a year earlier hit by tough competition and the global downturn.

Operating profit was 239 million Swedish crowns ($35.63 million) in the first six months of the year against 1.53 billion in the year-ago period.

Unit sales fell 4.1 percent to 221,309 cars.

“The economic uncertainties in most of our markets will remain for the rest of the year and competition is stiff,” CEO Stefan Jacoby said in a statement.

Volvo was bought by Geely from Ford Motor in 2010 for $1.8 billion in China’s biggest overseas auto venture. A union last week had said Volvo planned to cut production by about 10 percent and reduce its staff by 200 to 300 people to take account of a slowdown in sales.

The company has said in the past that it aims to increase sales by 2020 to 800,000 from just over 400,000 cars. That includes 200,000 cars in China, a leap from the 47,000 sold there in 2011. Geely also owns Chinese carmaker Geely Automobile Holdings Ltd. ($1 = 6.7072 Swedish crowns) (Reporting by Patrick Lannin)

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