Swedish carmaker Volvo Cars will record a one-off write-down of SEK11.4bn ($1.19bn) in the second quarter as it revises its outlook for the launch and sales of the EX90 and ES90.
According to a company press release, the revised outlook is due to the delayed sales launch as well as new import duties in a number of markets.
The life-cycle profitability of the EX90 will be lower than previously expected, despite significant improvements in its software quality and a planned ramp-up in production volumes. This is due to significant delays in its release in the past and subsequent additional development costs, the company said.
Meanwhile, following the imposition of new import duties by Washington, Volvo is unable to sell the ES90 model in the US at a profit, while its sales margins in Europe are also under pressure due to the duties.
As a result of the write-downs, Volvo’s net profit in the second quarter will be 9 billion kroner lower than it could have been, the press release said.
The company will release last quarter’s accounts on 17 July.
Volvo’s shares fell 1.4 per cent at the end of trading on Monday. Since the beginning of this year, their value has remained virtually unchanged.