STOCKHOLM (Reuters) - Geely-owned carmaker Volvo Car Group said on Thursday its 2014 operating profit rose 17.5 percent in its best year of sales to date as rapid expansion in China and recovery in Europe took the sting off lingering weakness for the brand in the United States.
Volvo sold a record 465,866 cars last year but is still far from its goal of selling 800,000 cars in 2020 and making real inroads into a premium market dominated by German heavyweights such as Daimler's (DE:DAIGn) Mercedes-Benz and BMW (DE:BMWG).
The Gothenburg-based company, bought by China's Zhejiang Geely Holding Group Co. from Ford Motor Co. (N:F) in 2010, said full-year operating earnings rose to 2.25 billion Swedish crowns (174.74 million pounds) ($302.00 million) from 1.92 billion in the previous year.
"It is essential to remember that the company is in an investment phase right now," Volvo Car Group Chief Executive Hakan Samuelsson said in a statement. "The fruits of these investments will start to be felt from this year."
The company, one of Sweden's biggest by sales and number of employees, is banking on continued strong growth in China to generate volumes needed to foot the bill for billions of dollars of investment in new models, but also needs growth elsewhere.
Volvo's turnover in the United States, once its top market but now eclipsed by China, has eroded over the past decade due to a dearth of new models and financing options while the lack of U.S. production has left it sensitive to dollar swings.
The company, whose U.S. sales fell 7.0 percent last year, has put in place a raft of measures, including new management, to seek to reverse the trend while it is also eyeing exports of Chinese-made Volvos to the United States.
Revenues across the group, which last year launched its first new car fully developed under Chinese ownership, rose to 129.96 billion crowns from a year-ago 122.25 billion, driven by sales of top models such as the XC60 crossover.
($1 = 8.3445 Swedish crowns)