STOCKHOLM -- Volvo said it plans to cut fixed costs by 2 billion Swedish crowns ($214 million), becoming the latest automaker to warn that pricing pressure and tariffs arising from the China-U.S. trade war are denting profitability.
Automakers are under pressure from trade conflicts, big investments needed to develop electric and driverless cars and an overall downturn in the car industry.
Volvo, part of China's Geely, has reworked its global production plans in an effort to reduce the impact of increased tariffs.
Volvo began reviewing its staffing and other costs earlier this year. So far it has cut 750 jobs, mainly engineering and IT consultants, and reduced the hourly wage for such consultants, which CEO Hakan Samuelsson said would lead to savings of 1 billion crowns ($107 million) from July.
The automaker said on Thursday that the new cost measures would start in the second half and run to the first half of 2020. Samuelsson said these would include some further job cuts but would mainly be focused on cost-cutting to save another billion ($107 million).
"Market conditions are expected to put continued pressure on margins, but the combination of volume growth and cost measures is expected to result in a strengthened profit in the second half of the year compared with the same period last year," Volvo said.