Volvo Cars (VOLCAR) Pre-close call summary

Executive summary

• Macroeconomic conditions remained challenging in Q3, with low visibility and subdued consumer sentiment across key regions.

• Global premium automotive segment forecasts have deteriorated, with sharper contractions expected in 2026, especially in China and the US.

Trading performance and revenue trends

• Retail sales volumes declined 13% quarter-to-date, with July down 8% and August down 19%.

• Discount levels remained high, particularly in China, amid weak demand.

• FX headwinds persisted, mainly due to Turkish TRY and Chinese CNY.

Profitability and margins

• Gross margin was negatively impacted by elevated discounts, higher freight costs, and FX headwinds.

• EBIT margin continued to face pressure from increased depreciation and amortization linked to new product launches and lower capitalisation rates.

• Q3 is expected to feel a greater impact from delayed higher raw material costs than Q1 and Q2.

• No major positive offsets to profitability are expected for Q3.