Volvo Cars is shrinking again. Automotive News reported that the Swedish automaker will cut about 2,500 jobs after swinging to a third-quarter loss. Quartz reported the same cut, and The Detroit News called it “more jobs,” which points to earlier rounds. CNBC reported the shares fell 24%, and Reuters called it a record plunge on widening losses and job cuts.
In a Bloomberg interview on Oct. 23, chief executive Håkan Samuelsson blamed China: “The market is much tougher than we thought just some six months ago. And especially China. It’s very challenging. I mean, the possibility to sell the Western developed cars in China is more or less gone, and the customers there are expecting to get Chinese cars with the Chinese software features.”
Volvo Cars trades in Stockholm with no U.S. listing, and it is a separate company from truckmaker AB Volvo.
Why Chinese Buyers Walked Away From Western Models
In Samuelsson’s view, Chinese buyers now shop for cars the way they shop for phones. Infotainment, voice control, driver assistance and frequent software updates drive the decision, and domestic brands improve those features quickly and cheaply. A car designed in Europe years earlier has trouble keeping up. He told CNBC that Chinese consumers want “domestic alternatives” and that without key software developed in China, “I think you cannot sell cars in China.” The company also cited “hypercompetition” from new Chinese rivals that put heavy pressure on pricing.
Job Cuts Buy Time While New Products Take Shape
Samuelsson framed the layoffs as a stopgap: “Right now, short term you just need to cut costs. But of course we are not going to make a successful company with cost cutting. So we need to come back. And in China you need to come back with the regionally developed products with Chinese software.”
Automotive News noted the new layoffs come on top of cuts announced after Samuelsson returned as CEO in 2025. Volvo has now reduced headcount repeatedly in a short span.
Geely Gives Volvo a Head Start Western Rivals Lack
Volvo Cars is owned by China’s Geely Holding. Samuelsson sees that ownership as his main tool: “And there we of course have a huge advantage that we can work and develop those cars together with Geely. The first two are being rolled out already the next year, and then more will come.”
He told CNBC that Volvo needs to share some platforms with Geely and develop infotainment and driver-assistance software in China, while most European rivals would need new joint ventures or licensing deals to get that kind of local engineering. Volvo already has it inside the family.
No Promise That This Round Is the Last
Samuelsson said “realistically, we don’t expect the tailwind to come from the markets,” so any improvement has to come from Volvo’s own cost actions. On whether more cuts could follow, he said “Hopefully it’s the last one,” adding that it “would be wrong to guarantee anything.”
Bloomberg reported that third-quarter revenue missed estimates, the operating loss was larger than expectations, and capital spending is expected to fall 20% to 30% compared with 2024. AutoNext reported that only Europe still pays its way for Volvo. In the U.S., the company pointed to tariffs and fewer customer incentives to buy electric cars as pressure on margins.
What Volvo’s Warning Signals for Legacy Carmaker Investors
Volvo’s results show the squeeze European legacy brands face on two fronts, as domestic makers in China take share with software-rich cars at aggressive prices. In Europe, those same companies are expanding, and Reuters reported that a record Chinese turnout put European carmakers under pressure at the Paris show. Tariffs add another layer of cost, especially for brands that ship cars across oceans.
The larger shift is toward software-defined cars, where features and updates matter as much as engines and styling. Investors considering any legacy automaker can ask three questions Volvo’s results raise:
- Where is the company’s software developed, and how quickly can it ship updates?
- Does it have local engineering partners in China, or does it rely on global models?
- How much of its profit depends on a single home region?
For Volvo, the next milestones are the launch of the first two Geely co-developed models next year, whether the cuts steady cash flow, and whether management announces another round.
Volvo’s China Comeback Plan Rests on Becoming More Chinese
Samuelsson’s message is that winning back Chinese buyers requires locally developed cars. His plan is to build cars in China, with Chinese software, alongside a Chinese owner. Whether that plan works will determine how much of Volvo’s presence in the world’s largest car market lasts.