Volvo Plans to Cut Costs Amid US Tariff Conflict
(MENAFN) Volvo is working to minimize its expenses through an action plan valued at approximately 18 billion Swedish krona (USD1.8 billion) in response to the challenges posed by US tariffs.
"To protect profitability and drive structural efficiencies on direct and indirect costs, as well as helping to offset external headwinds, the company has launched an accelerated cost and cash action plan," Volvo announced on Tuesday.
The company expects this plan to be fully implemented by 2026.
It noted that the strategy involves measures targeting variable costs and improvements in indirect spending.
"The reductions in investments are in addition to the already planned lower investments going forward, as previously communicated," Volvo explained.
As part of the cost-reduction efforts, there will be job cuts at its global operations, although the company indicated that further details will be shared soon.
Volvo also acknowledged facing more challenging market conditions, including lower sales volumes, increased pricing pressures, and the negative effects of tariffs on its profitability.
“The automotive industry is in the middle of a very difficult period with challenges not seen before,” stated Hakan Samuelsson, Volvo Cars' CEO.
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