Volvo Cars shares plunge 30% amid China, U.S. slump and fresh job cuts

Volvo Cars shares fell 30.7% after the European market opened, following the Swedish automaker's report of a 5.6 billion Swedish Kronor operating loss in the third quarter. The result reversed a prior operating profit of 6.4 billion Swedish Kronor and prompted the company to announce plans to cut 2,500 jobs globally.

The company attributed the downturn to deteriorating market conditions in China and the United States, which negatively affected free cash flow. In China, Volvo Cars revenues fell almost 50% year-on-year as premium brands faced what the company described as hypercompetition from new local rivals, creating severe pressure on pricing. In the United States, the firm cited negative effects from tariffs and reduced customer incentives for electric vehicles, both of which compressed profit margins.

To address these challenges, Volvo Cars stated it is targeting a cost reduction of 5 billion Swedish Kronor. The workforce reduction will impact 2,000 positions in Sweden and an additional 500 elsewhere.