Volvo 3Q25 Profit Beats Estimates Despite 8% Drop in Sales

Volvo reported 3Q25 operating profit above market expectations, driven by savings from a US$1.9 billion cost reduction plan. Operating income surpassed analyst estimates despite an 8% year-to-date decline in global vehicle sales through September.

“The action plan allowed us to reduce variable and indirect costs faster than expected during the quarter,” Volvo said in a company statement. The operating margin improved, and the company recorded “modest retail sales growth” in September.

The results follow a restructuring strategy launched by CEO Håkan Samuelsson, who returned to lead the company in April. Samuelsson is focused on restoring profitability by cutting thousands of jobs and reducing operational complexity. “We need to be a US company to produce closer to our customers,” he said in an interview with Bloomberg Television. “I am quite confident about the future of our company.”

Volvo is navigating higher trade barriers affecting automotive supply chains. Majority-owned by China-based Zhejiang Geely, Volvo produces several models in China and has been affected by US tariffs and EU import duties on Chinese-made electric vehicles. These measures have prompted a shift of production from China to Belgium and South Carolina. alongside organizational changes in China to address “stagnation in vehicle sales” in the local market.

The company plans to expand its lineup to support revenue growth, including the XC70 plug-in hybrid SUV, produced in Taizhou, China, initially for the domestic market but potentially for export later. Volvo will also launch the EX60, a fully electric midsize SUV replacing the XC60, in January.

Earlier announcements indicated a 7% workforce reduction linked to declining profitability in previous quarters. Volvo said these measures are part of a long-term efficiency plan to streamline production, consolidate suppliers, invest in electrification, and reduce exposure to tariff volatility.

Samuelsson emphasized that cost discipline, production relocation, and targeted product launches will remain central to Volvo’s operating strategy, aligning manufacturing with trade requirements and consumer demand in key regions.