VOLVO Cars has reported a huge 75 per cent increase in operating profit, excluding joint ventures and associates, to SEK 6.1 billion ($A890m) for the third quarter of 2023. 

Its revenues grew 16 per cent to SEK 92 billion ($A13.4b) and global retail sales were up 22 per cent.

Sales of Volvo’s full-electric models soared 111 per cent in the quarter compared with the same period in the previous year, spurring it to introduce its next generation, the EX30, the EX90 and the EM90 in 2024.

The EBIT (operating) margin (excluding joint ventures and associates) was at 6.7 per cent, up from a margin of 4.4 per cent in the same period last year. 

Volvo attributed the strong profit figures in part to a combination of lower costs for raw materials and logistics. 

It said lower lithium prices and reduced spot prices for semiconductors were helping to lower production costs, while the company made greater efficiencies in internal costs and increased the prices of its model year 2024 fully electric cars.

Volvo Cars president and CEO Jim Rowan said: “Our operating performance is gathering momentum, while we continue to make steady progress on our transformation objectives.”

“As such, the quarter developed as we planned and communicated, putting us in a good position to close out the year with solid double-digit growth in retail volumes and a considerably higher share of fully electric cars for the full year. 

“At the same time, uncertainties remain on the horizon, and we continue to be watchful.”

Volvo Cars has now reported 13 consecutive months of retail sales growth, illustrating solid demand for its cars, despite pricing pressures in many parts of the world.

The company’s pure electric sales share of 13 per cent for the quarter was almost double what it was in the same period in 2022, increasing by 111 per cent year-on-year. 

It said that this underlines that it is well on its way to become “one of the fastest transformers in the industry.” 

“The launch of the competitively priced, fully electric EX30 SUV will serve to strengthen its position and help the company in its ambition to become a fully electric car company by 2030,” it said.

“Customer response to models such as the EX30 has been strong, and the small SUV generated higher than expected pre-orders. 

“EX30 production started in the third quarter and the first cars are expected to be delivered during Q4, with production and deliveries ramping up in earnest in 2024.”

Demand has meant Volvo Cars will add another manufacturing site for the EX30 with the Ghent plant in Belgium adding to the Chinese factory output from 2025. 

“This decision reflects the strong demand for the EX30, supports Volvo Cars’ strategy of building where it sells, and boosts production capacity for the car in Europe as well as for global export,” it said. 

The move also puts Volvo at a safe distance from current European car industry moves to push the European Union for tariffs on Chinese-made EVs. Tariffs currently apply on Chinese cars sold in the US.

Volvo also said in its financial report that its solid operational performance and good momentum was reflected in the company’s key operational indicators. 

“Production volumes in the third quarter were up by 16 per cent versus the same period a year ago, as availability and visibility continued to improve in the supply chain,” it said.

“Commercially, Volvo Cars’ order book remained stable and the company managed to maintain premium pricing.

“Its strong brand position, based on safety, quality and Scandinavian design, has proven to be a real asset in maintaining its premium pricing position.”