Volvo Cars lowers its full-year outlook and reports sales collapse

"An increasingly challenging market situation and deteriorating short-term outlook have led to lower-than-expected sales and a worsening full-year outlook," writes the car manufacturer in a press release.

During the third quarter, Volvo Cars' global sales fell 10.7 percent compared to the same period last year, down to 141,609 cars sold, the company writes in a separate press release.

Headwinds in China - where the year-on-year decline was almost 41 percent in the third quarter - are cited as a main reason for the decline, but also an unexpectedly weak recovery for US sales.

"This development will have a significant negative impact on the result for the core business and cash flow during the third quarter, in addition to the previously communicated challenges from raw materials, currency effects and increased depreciation and impairment levels," writes Volvo Cars.

"Volvo Cars is taking further decisive steps to improve and accelerate the execution of our strategic roadmap in a challenging market environment. The company will present more information in connection with the report for the third quarter on October 23," the company added.

According to the latest annual report, the Gothenburg-based car manufacturer had approximately 42,600 full-time employees - with production facilities in Gothenburg, Ghent, Belgium, South Carolina, the USA, and in several locations in China.

Research, development and design take place in Gothenburg and Shanghai.

Volvo Cars - whose shares have fallen by roughly 50 percent since the turn of the year - recently announced that the German Klaus Zellmer will take over as CEO no later than October 2027, after CEO Håkan Samuelsson announced that he will leave the position when his contract expires this spring.

The listed company is controlled by the Chinese automotive conglomerate Zhejiang Geely Holding Group.