Volvo reports a 40% increase in car sales in May as COVID-19 restrictions start to ease

In a report on Wednesday, Geely Holdings (HKG: 0175) said that its subsidiary, Volvo Cars, saw a 40% increase in sales in May as compared to the prior month, as governments started easing Coronavirus restrictions enabling factories to restore production and businesses to return to work.

Despite the recovering demand, sales still came in 25.5% down in May as compared to the same month last year. The Swedish company said that it sold 44,380 cars in May. In April, the figure was capped at a much lower 31,760 units.

Shares of Geely printed a 1.0% intraday increase on Wednesday. At £1.17 per share, the Chinese automotive company is roughly 25% down year to date in the stock market. Learn more about why prices rise and fall in the stock market.

Volvo registers a 21.8% year over year sales growth in China

The company further added that it saw early signs of recovery in all three of its primary markets. Growth was robust in China, traffic at its showrooms surged in Europe, and demand started catching pace faster than expected in the United States.

On a year over year basis, however, Volvo’s sales were up only in the Chinese market last month. The company recorded a 21.8% growth in sales in China, while in Europe, sales were down by 50% in May, and a 2.5% decline was also noted in the United States.

In the five months from January to May, Volvo sold a total of 208,469 vehicles that marks a 25% decline as compared to the comparable period of last year. Sales in the five months were down 7.1% (year over year) in China, 18.2% in the United States, and 34.3% in Europe.

SUVs made up 68.5% of total sales in May

In terms of individual models, Volvo said that its mid-size SUV XC60 was the greatest in demand in May. Other prominent models that contributed to an increase in the company’s sales in May as compared to April included its large SUV XC90 and the compact SUV XC40. As per Volvo, SUV sales made up about 68.5% of its total sales last month that translates to a 61% increase versus the year-ago figure.

Volvo’s parent organisation, Geely Holdings recently announced plans of expanding its partnership with the German auto manufacturer, Daimler.

At the time of writing, Geely Holding Group has a market cap of £10.82 billion and a price to earnings ratio of 11.82.