7:26 am, October 5, 2026
Volvo Cars has abandoned its sales and cash flow forecasts for 2026 after worsening conditions in China and a sluggish recovery in the US left the manufacturer facing a weaker end to the year.
In a statement, the Swedish carmaker admitted that lower-than-expected sales mean it will no longer meet its previous full-year guidance on volumes and cash flow.
It has also decided against issuing replacement short-term forecasts due to the level of uncertainty currently facing the business.
Volvo blamed the downgrade primarily on ‘further deteriorating market conditions’ in China and a slower-than-expected recovery in the US, although it said Europe remained resilient.
The manufacturer warned that the developments will also have a ‘significant negative impact’ on its third-quarter core earnings and cash flow.
That comes on top of previously flagged pressures from raw material costs, foreign exchange movements and higher amortisation and depreciation.
According to Reuters, Volvo sold 141,609 cars globally during the third quarter – an 11% drop compared with the same period last year.
The company said industry volumes in China remained under ‘significant pressure’, with no sign of the downturn easing, while the premium market in the US was taking longer to recover than expected.
The update represents a notable change from the outlook it issued in July.
At the time, the company was forecasting significantly stronger sales during the second half of 2026 and strong positive free cash flow towards the end of the year, Reuters reports.
Volvo has now said: ‘An increasingly challenging market situation and deteriorating near term market outlook has resulted in lower-than-expected sales and a weaker full year outlook for Volvo Cars.
‘Therefore, Volvo Cars will not fulfil the previous full year 2026 outlook statements on volume and cash flow.’
The manufacturer said it was taking further action to accelerate its strategic plans and will provide more details when it publishes third-quarter financial results on October 23.
Volvo stressed that withdrawing its short-term forecasts does not change its longer-term ambitions, which include generating strong positive cash flow and building towards an 8% EBIT margin.
The latest warning comes ahead of a change at the top of the business, with Skoda boss Klaus Zellmer recently named as Volvo Cars’ next president and CEO.
A major priority of his will to revive sales in an increasingly competitive global market.
Investors reacted negatively to the latest warning, with Volvo shares falling as much as 4% to a record low on Friday before recovering some ground. Reuters reported that the company’s shares had lost around half their value since the beginning of the year.