Volvo Cars has reported an operating profit of SEK 14.2 billion for 2018, an increase of 0.9% compared with 2017.

The company’s net revenue increased by 21% to SEK 252.7 billion on the back of its best-ever annual sales of 642,253 cars, an increase of 12.4% compared with 2017.

Chief executive Håkan Samuelsson (www.volvogroup.com) said: “This result is in line with our expectations, but it does not live up to our longer-term ambitions.

"Revenue growth and sales in 2018 were healthy, but profitability was affected by external factors such as tariffs
and increasing price competition in several markets.

"For 2019, we see another year of volume growth, as we continue to benefit from our strong product programme and increased capacity, but we have to acknowledge that margins will remain under continued pressure.”

Net revenue in the fourth quarter increased by 20% to SEK 73.0 billion, as retail sales rose by 7.3% to 169,700 cars. The operating profit margin for the period was 6.2%, up from 5.9% for the fourth quarter of 2017.

Volvo, which has been owned by China’s Zhejiang Geely Holding since 2010, formed part of the Swedish Volvo Group until 1999, when it was bought by Ford Motor Co of the USA.