Volvo's profitablity waning
In Ford's Premier Auto Group (PAG) one manufacturer has stood alone, sustaining a high degree of prosperity in the past. However, in the last two years, Volvo has seen a decline in its new vehicle sales and judging by figures from the first half of 2006, those numbers seem to be dwindling even more.
As far as dollars and cents are concerned, PAG condenses all of its manufacturers' earnings into one lump, so the ability to parse out who is losing what is a task reserved for only the geekiest of accounting wizards. What we do know is that PAG, as a whole, had broken even last year, while the second quarter of 2006 shows a loss of $162 million. Not massive, but worrisome.
Analysts are pointing to a number of factors leading to Volvo's decline and at the forefront of those issues is an aging product line. Thankfully, Volvo is addressing this issue head-on, granting the S80 with a thoughtful redesign, as well as bringing the new C70 into the marketplace. The entrance of the C30 hatchback, which fills a niche previously untouched by the Swedish manufacturer, may give Volvo the added boost it needs, especially if it is well received here in the States in 2008.
[Source: Automotive News - sub required]
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