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UPDATE 1-Geely's Volvo Car Group upbeat on 2017 after earnings jump
February 8, 2017 / 7:50 AM / 10 months ago

UPDATE 1-Geely's Volvo Car Group upbeat on 2017 after earnings jump

* Annual operating profit 11 bln crowns, up from 6.6 bln

* Revenue of 180.7 bln up from 164.0 bln

* To add 700-800 staff at Gothenburg plant (Adds CEO comment, background)

STOCKHOLM, Feb 8 (Reuters) - Volvo Car Group reported a jump in 2016 earnings and revenue on Wednesday and forecast higher sales this year helped by new models developed under Chinese owner Geely.

Operating earnings rose to 11.0 billion Swedish crowns ($1.24 billion) from 6.6 billion a year earlier.

The company was bought by China’s Zhejiang Geely Holding Group Co. from Ford Motor Co. in 2010.

It has invested in new models and plants to secure a niche in the premium auto market which is dominated by Daimler’s Mercedes-Benz and BMW.

Gothenburg-based Volvo reported record high sales of 534,332 cars in 2016. One of Sweden’s largest companies by sales and number of employees, Volvo has set an annual sales goal of 800,000 cars in the medium term.

That is seen as a sufficient level to ensure its place in the market and to sustain future investments.

“I foresee that 2017 will also be a record year in terms of sales,” CEO Hakan Samuelsson said in a statement.

Samuelsson told Reuters he expected profitability to stay at a “very strong level” this year as the automaker continued to replace older models with the likes of its new XC60 and XC40 SUVs.

“This year will be a year with heavy industrial transformation,” Samuelsson said. “Two new cars will come out and at the end of the year we will, for the first time, have an all-modern line-up of SUVs.”

Global auto markets, not least a Chinese premium segment where Volvo has made inroads since Geely’s acquisition, are seen helping sales of a model line-up that has added the new XC90 SUV and 90-series in recent years, he said.

Volvo also said it was looking to hire an additional 700 to 800 employees at its Torslanda plant in Gothenburg in western Sweden.

Last year Volvo also took steps toward an eventual listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares, though Samuelsson repeated there were currently no plans for an IPO.

“This is something for the owner,” he said.

“We are focusing on improving the performance of the company and being transparent in our reporting.”

$1 = 8.8868 Swedish crowns Reporting by Niklas Pollard; editing by Alistair Scrutton and Jason Neely

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