Headlines
S&P lowers outlook on Volvo Cars rating citing US tariffs, competition in China
Published by Global Banking & Finance Review®
Posted on May 30, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 30, 2025
2 min readLast updated: January 23, 2026
S&P downgraded Volvo Cars' outlook to negative due to US tariffs and Chinese competition, impacting growth and profitability.
STOCKHOLM (Reuters) -S&P on Friday lowered the outlook for its BB+ credit rating on Volvo Cars to "negative" from "stable", saying U.S. tariffs and tougher competition in China were hurting the company's growth prospects.
The Sweden-based automaker, which is majority-owned by China's Geely, last month withdrew its earnings guidance and announced cost cuts, which will include laying off some 3,000 mostly white-collar workers amid a slowdown in demand.
"The negative outlook on Volvo Cars reflects its large exposure to U.S. import tariffs and the increasing marginalisation in the Chinese market," S&P said in a statement.
"We expect Volvo Cars' profitability and cash generation after investments to come under pressure in 2025-2026, partly alleviated by a substantial cost reduction programme."
The United States represented 16% of Volvo Cars sales in 2024, while China accounted for 20%.
Volvo Cars produces only one of its models in the United States, and relies on imports for the rest, leaving the company more exposed to U.S. tariffs than many of its European peers.
S&P said a proposed 2027 U.S. ban on automakers controlled by a Chinese entity also weighed on the outlook.
In the most recent twist in the trade turmoil sparked by President Donald Trump, a U.S. court on Thursday temporarily reinstated sweeping new tariffs, a day after another U.S. court had ordered an immediate block on them.
(Reporting by Anna Ringstrom, editing by Terje Solsvik and Tomasz Janowski)
S&P lowered the outlook for its BB+ credit rating on Volvo Cars to 'negative' from 'stable'.
The negative outlook reflects Volvo Cars' large exposure to U.S. import tariffs and increasing competition in the Chinese market.
The United States represented 16% of Volvo Cars sales in 2024.
Volvo Cars announced a cost reduction program that includes laying off about 3,000 mostly white-collar workers.
S&P expects Volvo Cars' profitability and cash generation to come under pressure in 2025-2026.
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