Volvo Delays Going Public Due To Current Trade Tensions

Industry News

The Swedish automaker just can't catch a break.

Despite posting record sales in 2018, Volvo has been facing adversity as it seeks to grow as a globally respected luxury brand. The Swedish automaker planned to go public with an IPO but was disheartened when the initial valuation wasn't as high as its Chinese owners Geely had hoped for. Now, Automotive News Europe reports that Volvo will delay its IPO, citing automotive stock downturns and recent trade tensions as the cause.

"We have come to the conclusion that the timing is not optimal for an IPO right now," Volvo CEO Hakan Samuelsson told Reuters in an interview. Volvo had initially been targeting a valuation of $16 billion to $30 billion, but the initial estimate maxed out at just $18 billion. This could be the result of automotive stocks being down 15% this year in the Stoxx 600 Autos & Parts index, but global trade concerns may have also had a huge impact on Volvo's valuation.

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Volvo has already been forced to move production of some XC60 models from China to Europe in the midst of trade tensions. Even Volvo's S60 sedan, which is built in the US, would be hurt because Volvo would be forced to pay a tariff to export it to other markets. This whole downturn shouldn't affect Volvo too seriously, as the company continues to pump out exciting new models with various forms of electrification.