Volvo Cars (VOLCAR) Pre-close call summary

Executive summary

• Global macroeconomic conditions remain challenging, with subdued consumer sentiment in key regions through Q2 2026.

• Euro area and US consumer confidence indices remain well below historical averages, indicating ongoing household caution.

• The global premium automotive segment is forecasted to contract by 4% in 2026, with sharper declines in the US and China.

Trading performance and revenue trends

• Retail sales volumes declined 9% quarter-to-date, with April down 11% and May down 7%.

• Wholesale volumes are prioritized for revenue assessment; FX remains a headwind but less severe than Q1.

• Discount levels are elevated in Q2 due to new model year introductions, a recurring annual pattern.

Profitability and margins

• Gross margin is pressured by high discounting and the phase-out of the 2026 model year.

• Freight and raw material costs have increased, with Q2 more impacted than Q1.

• Depreciation and amortization are rising due to new product launches, notably the EX60.

• EBIT margin in Q1 benefited from seasonal inventory buildup.