Volvo Cars brings back former boss to provide ‘steady hand’

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Volvo Cars has brought back former boss Håkan Samuelsson to provide the Geely-owned Swedish carmaker with a “steady hand” needed to navigate geopolitical turbulence and cut-throat competition.

Samuelsson, who turned 74 this month, served as the group’s chief executive for a decade until 2022. The company’s share price has fallen 66 per cent in the past three years under Jim Rowan as it struggled with the industry’s slower-than-expected shift to electric vehicles. 

“The car industry is under pressure from many directions,” Samuelsson, who will start a two-year term on Monday, said in a statement on Sunday. “I’m honoured to return at such a defining moment for Volvo Cars.” 

Rowan’s abrupt resignation came after he recently warned of lower profitability and a “very challenging year” ahead for the company, partly because of the uncertainty caused by US President Donald Trump’s trade policies. Rowan could not immediately be reached for comment.

“The industry is probably under the highest pressure ever. It’s not just internal problems for Volvo. In that time, you only have one chance. You have to play a safe card,” said a person close to the Gothenburg-based carmaker.

Analysts have said the carmaker will be hit hard by a 25 per cent tariff the US plans to impose on foreign car imports from April 2 as it relies on exports from Europe for sales in the US.

Depending on the level of the tariffs, Volvo Cars has said it wants to increase production in South Carolina. But that may not completely shield it from tariffs because even locally-produced cars use a high amount of non-US content. The company is also exposed to a government ban on Chinese software in electric vehicles in the US. 

To address the EU’s higher tariffs on imports of electric vehicles made in China, Volvo Cars will also produce its EX30 EV model in its Ghent plant in Belgium, as well as in China from this year.

Geely’s founder Eric Li, who is the chair of Volvo Car’s board, cited Samuelsson’s “industrial depth” and “proven leadership” as a reason for bringing him back.

“As the industry enters an even more complex phase, we believe his experience and steady hand are exactly what is needed to strengthen Volvo Cars’ global position,” Li added. 

A person familiar with the board’s thinking said that Volvo Cars needed to be prepared for a “much tougher future” that would require cost-cutting and Samuelsson to try to unlock more advantages from the Chinese ownership, including access to cheaper suppliers.

A person close to the company said Geely had been frustrated with Volvo Car’s valuation even from the time of its initial public offering in Stockholm in 2021, which Samuelsson oversaw.

In addition to his steady record, the person said Samuelsson was also popular with both employees and car dealers.

The Swedish carmaker last year abandoned plans to sell only electric cars by the end of the decade.

Volvo Cars will also be hit by the EU’s relaxation of emissions targets since it may lose some of the revenue it earned from selling credits to rivals that were lagging behind it in reducing carbon emissions.