Turnover at Volvo Cars Ireland rose 24.6 per cent last year to €56.3 million, largely on the back of the popularity of its new flagship SUV, the XC90.
Accounts filed for 2016 show that Volvo’s turnover broke down into €52.17 million in new car sales and €4.17 million in parts. The cost of stock during the year rose by more than €10 million to €46.95 million compared with the previous year.
The Irish subsidiary of the Swedish premium brand reported an operating profit of €283,717 for the year. This was down 28 per cent on 2015. That was attributed to a change in the firm’s transfer pricing model in relation to the allocation of administrative expenses.
According to the directors’ report, Volvo car sales grew by 27.7 per cent last year, outperforming the overall new car market, which grew by 17.4 per cent.
Its XC90 flagship SUV was the key reason for that sales success, while the company’s directors acknowledge that the launch of the new S90 saloon and estate during the year had “been slower than anticipated, largely due to unprecedented activity in the segment following the UK’s decision to leave the EU”.
“Brexit has had an immediate impact on the Irish economy and the used car market in particular. The decline of sterling and the uncertainty created have resulted in an increase in new and used cars imported in to Ireland,” the report states. It also identifies the “significant and aggressive competitor activity from the German brands seeking to maintain market share”.
While Volvo finished 2016 with a market share of 1.36 per cent based on 1,997 new-car registrations, German rivals Audi secured a 4.14 per cent share, BMW a 3.76 per cent share and Mercedes-Benz a 2.58 per cent share.
The directors estimate new car sales for 2017 at 132,000 and point to the new models arriving this year along with increased investment in its dealer network and customer service systems. The new model range being rolled out over the next four years is part of a major investment in the brand by its Chinese owner Geely. The firm plans to introduce its latest edition to the range, the XC40, by the end of this year.
Sales figures for this year, to the end of September, show Volvo has a 1.34 per cent share of the market, based on 1,718 new registrations. Audi is leading the premium segment of the new car market with a share of 4.2 per cent.
With an average of 10 employees, the firm’s staff costs rose during the year to €764,256, up 11 per cent.
