Global automakers report sharp profit declines amid tariffs and weak demand
Volvo Cars, Fiat, and Mitsubishi Motors all posted significant earnings drops in recent quarters, citing U.S. tariffs, currency headwinds, and sluggish market conditions.
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Volvo Cars shares fell more than 22% on Thursday, putting the Swedish automaker on track for its worst trading day ever, after the company reported a substantial decline in fourth-quarter operating profit.
The automaker, owned by China's Geely Holding, attributed the drop to the impact of U.S. tariffs, negative currency effects, and weak demand. Fourth-quarter operating income excluding items affecting comparability reached 1.8 billion Swedish krona ($200.46 million), representing a 68% decline compared to the same quarter a year earlier.
Volvo Cars CEO Hakan Samuelsson told CNBC that the company faces a challenging market environment. "We have a very challenging market, especially in China, very tough competition. All of our European colleagues have the same problem," he said.
Elsewhere in the automotive sector, Fiat reported mixed results for 2025 in Spain. The Italian carmaker recorded 20,926 total vehicle registrations combining passenger cars and commercial vehicles for the year. Fiat's passenger car sales declined sharply, with the 500 model registering only 711 units, a 91.72% drop from the prior year. The company attributed the decline partly to the absence of thermal engine options for the 500, as consumer acceptance of electric vehicles has been slower than anticipated.
Commercial vehicles and the Fiat 600 model offset some of the losses. The 600, offered with multiple powertrain options including electric and hybrid variants with 110 or 145 horsepower, recorded 5,273 registrations in 2025. Fiat Iberia director Paulo Carelli described the year as one of "resistance, in which Fiat has fought to maintain its place in the market."
In Japan, Mitsubishi Motors reported a net loss of 4.489 billion yen for the nine-month period from April through December 2025. Operating profit fell 69.8% to 31.627 billion yen compared to the same period in the prior year. The company cited tariffs and other market pressures as contributing factors to the decline.