Why Volvo Cars chose Klaus Zellmer after Håkan Samuelsson’s turnaround reset

Volvo Car AB (Nasdaq Stockholm: VOLCAR B), the Gothenburg-based premium automaker majority-owned by Zhejiang Geely Holding Group, has appointed Klaus Zellmer as its next president and chief executive as the company moves from emergency cost reduction toward a longer-term attempt to rebuild growth and profitability. Zellmer, currently chairman of the management board and CEO of Škoda Auto, will assume the Volvo Cars role no later than October 1, 2027, succeeding Håkan Samuelsson after his second period leading the company. Volvo Cars Chairman Eric Li said Zellmer’s experience spanning premium and high-volume automotive brands made him suited to navigating the transformation now confronting the Swedish manufacturer.

The appointment comes only three days after Volvo Cars unveiled its largest product offensive in its 99-year history, with 13 new regionally tailored electrified vehicles planned through 2030 and a long-term ambition to generate an EBIT margin above 8%. The strategy relies on more regional product development, greater use of shared Geely technology and components, lower investment per vehicle and continued reductions in corporate overhead after Volvo Cars’ earlier SEK 18 billion cost-and-cash programme removed approximately 3,000 positions globally. Zellmer will therefore inherit a company that has already gone through a major workforce reset but still needs much stronger financial returns from the leaner organisation that remains.

The scale of that challenge is clear in Volvo Cars’ latest financial performance. Second-quarter 2026 revenue fell to SEK 77.7 billion from SEK 93.5 billion a year earlier, while operating income was only SEK 0.8 billion and the EBIT margin stood at 1.1%. Cost reductions are providing meaningful protection, with Volvo Cars delivering SEK 5 billion of targeted full-year savings six months ahead of schedule, but global retail sales remained under pressure and the company continues to face tariffs, weaker demand in China and intense competition across the premium electric-vehicle market.

Why has Volvo Cars chosen Klaus Zellmer for its next phase?

Zellmer brings more than 30 years of automotive experience spanning Porsche, Volkswagen and Škoda, giving Volvo Cars a leader who has worked across both premium vehicles and larger-volume operations. Before taking charge of Škoda Auto, he served on the Volkswagen Passenger Cars management board responsible for marketing, sales and after-sales, while more than two decades at Porsche included leadership roles as CEO of Porsche Germany and Porsche Cars North America. Volvo Cars highlighted that combination because its next strategic phase requires the company to defend a premium brand while simultaneously improving industrial scale, product costs and market reach.

His record at Škoda is particularly relevant because the Czech manufacturer has expanded while operating inside Volkswagen Group’s shared technology and manufacturing ecosystem. Volvo Cars is pursuing a similar logic with Geely, aiming to retain its own design, safety positioning and premium identity while sharing more underlying parts, platforms and supply-chain capabilities. Zellmer therefore arrives with first-hand experience of managing a brand that needs differentiation at the customer level while extracting efficiencies from a larger automotive group.

The appointment also gives Volvo Cars a successor identified well before Samuelsson’s departure becomes effective. Samuelsson returned as chief executive in April 2025 after previously leading Volvo Cars from 2012 to 2022, with a mandate to stabilise the business, establish a new strategic roadmap and prepare the organisation for longer-term leadership. Volvo Cars has not disclosed Zellmer’s exact starting day beyond saying he will assume the role no later than October 1, 2027, while Samuelsson and the board will work to ensure a seamless transition.

What workforce does Klaus Zellmer inherit after Volvo Cars cut 3,000 positions?

Volvo Cars employed an average of approximately 42,600 full-time employees during 2025, with manufacturing operations in Sweden, Belgium, the United States and China alongside research and development centres in Gothenburg and Shanghai. The company’s May 2025 restructuring targeted approximately 3,000 positions, including consultants, equivalent to around 15% of its global office-based workforce. Most of those reductions were expected to fall on office-based roles in Sweden rather than directly on manufacturing employment.

The cuts formed part of a SEK 18 billion cost-and-cash programme launched when deteriorating market conditions began exposing the expense structure created during Volvo Cars’ rapid electrification push. The programme included SEK 3 billion of variable-cost actions, SEK 5 billion of indirect-spending efficiencies and another SEK 10 billion of cash measures targeting working capital and capital expenditure. By the second quarter of 2025, approximately 1,100 employees had already left as implementation accelerated.

Those actions mean Zellmer will not begin with the same organisational base Samuelsson inherited on returning to the CEO role. Volvo Cars has already removed substantial corporate capacity and repeatedly emphasised the creation of a leaner, structurally lower cost base, which places greater pressure on the remaining organisation to deliver new products without allowing overhead to rebuild. The September strategy update shows that workforce efficiency remains part of the agenda because management said it intends to make corporate overhead leaner and improve productivity throughout the value chain even after the original restructuring programme.

Why is Volvo Cars targeting an EBIT margin above 8% after reporting only 1.1% in the second quarter?

The gap between current and targeted profitability is one of the clearest measures of the task Zellmer will inherit. Volvo Cars reported a second-quarter 2026 EBIT margin of just 1.1%, while its new strategy is designed to build a company capable of exceeding 8% over the longer term. Management believes the improvement can come from lower vehicle-development costs, greater parts commonality, a more efficient regional manufacturing system, stronger pricing and higher profitability from vehicles built on mature platforms.

The business showed much stronger underlying profitability before the latest industry downturn. Volvo Cars recorded adjusted operating income of SEK 12.5 billion for 2025, equivalent to a 3.5% adjusted EBIT margin, after generating record revenue above SEK 400 billion and a 5.6% reported EBIT margin in 2024. The deterioration therefore reflects not only structural inefficiency but an unusually difficult combination of tariff costs, pricing pressure, product-transition expenses and softer demand in important markets.

Zellmer will consequently need to prove that the cost savings achieved under Samuelsson can become permanent margin improvement rather than disappear into lower pricing or higher product expenditure. Volvo Cars expects seven Western-market vehicles to use existing SPA2 and SPA3 investments, reducing the incremental capital required compared with the first vehicle developed on a new platform. If that approach works, more of each future vehicle’s revenue could theoretically reach operating profit instead of being absorbed by repeated platform and manufacturing investments.

How does Volvo Cars’ 13-model plan change the CEO role?

Volvo Cars intends to launch 13 entirely new vehicles by the end of 2030, with seven primarily aimed at Western markets and six developed specifically for China. The programme includes battery-electric vehicles and hybrids rather than relying on a single propulsion strategy, reflecting management’s recognition that electrification is progressing at different speeds across countries. Reuters reported that Volvo Cars wants the product offensive to help double its market share while navigating tariffs, weaker Chinese demand and rapidly changing customer preferences.

That gives Zellmer an unusually product-heavy mandate. The incoming CEO must oversee simultaneous vehicle launches while preventing product complexity from reversing the cost reductions Volvo Cars has already achieved, and he must do so across markets that increasingly require different software, regulation and powertrain solutions. Volvo Cars is effectively moving away from the assumption that one globally standardised portfolio can maximise returns everywhere.

The strategy creates organisational implications as well because regionalisation pushes more responsibility closer to individual markets. China-specific vehicles will draw more heavily on Geely platforms, software and supply chains, while Western models will increasingly use Volvo Cars’ SPA architecture and production network. That structure may improve responsiveness, but it also requires strong governance to prevent regional organisations from duplicating engineering, purchasing or administrative functions that the company has spent the past two years trying to streamline.

Why is Volvo Cars sharing more technology and components with Geely?

Volvo Cars believes deeper collaboration with Geely can materially reduce future vehicle costs without eliminating the brand’s independence. The company currently estimates around 10% full commonality in parts and wants that figure to reach roughly 30% by 2030, which it expects could produce approximately 5% of material cost savings alongside additional indirect benefits. China-specific cars will make especially extensive use of shared platforms, software and supply-chain resources.

The economic logic resembles the platform-sharing strategies used across Volkswagen Group, where multiple brands retain distinct customer identities while using common engineering underneath. Zellmer’s Škoda background becomes especially relevant because he has managed a manufacturer whose competitiveness depends heavily on successfully using group technology without becoming indistinguishable from sibling brands. Volvo Cars will need the same balance if deeper Geely integration is to improve margins without weakening the brand attributes that allow it to charge premium prices.

The approach also reflects geopolitical reality. Reuters reported that Volvo Cars is increasingly having to separate Chinese and Western technologies to preserve access to markets such as the United States, where regulatory concerns around Chinese-connected vehicle technology have increased. Regionalising both technology and production therefore serves two purposes: reducing costs through group synergies where possible while limiting regulatory exposure where common systems could create commercial barriers.

Why are tariffs reshaping Volvo Cars’ manufacturing footprint?

Trade barriers have become a central strategic issue for Volvo Cars because a vehicle manufactured in one region and sold in another can suddenly become materially less profitable when tariffs change. The company has responded by moving more production closer to the customers it serves, including plans to manufacture the XC60 in South Carolina and increasing EX30 production at its Ghent plant in Belgium. Reuters said those actions are intended partly to reduce Volvo Cars’ exposure to import tariffs while strengthening the regionalisation strategy Samuelsson has developed.

Regional production can also provide greater currency and supply-chain resilience, but operating factories across several continents raises another challenge: utilisation. A plant running well below capacity can quickly become a significant drag on profitability because labour, maintenance and depreciation continue even when vehicle volumes weaken. Volvo Cars has said it currently has no plans for broad factory closures, making improved utilisation through new models and potentially contract manufacturing increasingly important to reaching its margin targets.

Zellmer’s manufacturing decisions will therefore be closely linked with the workforce outlook. Unlike the earlier 3,000-position programme, which primarily targeted office-based employment, a prolonged volume decline could eventually raise harder questions around plant staffing and capacity if the 13-model offensive fails to lift demand. Conversely, successful regional launches could allow Volvo Cars to protect manufacturing employment while maintaining the leaner corporate structure created under Samuelsson.

Why does China remain one of Volvo Cars’ biggest strategic risks?

China is both a major market and an important part of Volvo Cars’ ownership and industrial ecosystem, making weakness there particularly complex. The premium segment is under intense pressure from domestic manufacturers offering advanced software, electrified drivetrains and aggressive pricing, while Volvo Cars has also had to adapt its products to increasingly distinct Chinese consumer preferences. Reuters identified slumping sales in China as one of the principal challenges facing the company as it prepares for Zellmer’s arrival.

Volvo Cars’ response is to stop treating China as merely another destination for vehicles designed primarily around Western markets. Six of the 13 planned models will be developed specifically for Chinese customers, using more Geely technology and a dedicated Chinese software stack. That approach could improve competitiveness and lower development cost, but it also creates a more complicated global organisation in which engineering and digital systems vary by region.

The incoming CEO will therefore need to demonstrate that regionalisation creates speed rather than fragmentation. China can provide Volvo Cars with access to Geely’s technology and supply-chain scale, yet dependence on the Chinese ecosystem simultaneously creates regulatory challenges elsewhere. Successfully managing that tension may become one of Zellmer’s most important strategic responsibilities.

What does strong EX60 demand tell Klaus Zellmer about Volvo Cars’ electric strategy?

The EX60 provides one of the clearest positive indicators inside Volvo Cars’ current transition. Customer demand after the electric SUV’s launch exceeded internal expectations in several European markets, prompting the company to increase 2026 production and consider keeping its Torslanda plant operating for an extra summer week for the first time in its history. More than 3,000 orders were recorded in Sweden alone during the initial launch period.

Electric vehicles have also performed better than Volvo Cars’ overall sales trend. Second-quarter global deliveries declined 5.6% to 171,501 vehicles, but fully electric deliveries increased 14%, supported by the EX30 and EX40 alongside growing EX60 orders. Fully electric models accounted for 25% of second-quarter sales and total electrified vehicles represented 52%, showing that Volvo Cars remains materially exposed to the transition even though management has adopted a more flexible approach that keeps plug-in hybrids in the portfolio.

For Zellmer, the challenge is therefore not whether Volvo Cars should abandon electrification but how profitably it can execute it. The company has invested heavily in platforms, software and manufacturing capacity, and the next phase must extract greater returns from that installed capability. High-volume vehicles such as the EX60 will be crucial because stronger utilisation of existing technology can spread fixed development expenses across more vehicles.

How have Volvo Cars shares performed ahead of the Klaus Zellmer appointment?

Volvo Cars shares closed at SEK 16.83 on September 18, down 7.5% for the session and at the bottom of the stock’s 52-week range. Reuters reported on September 20 that the shares were down more than 45% during 2026, demonstrating that investors remain sceptical despite progress on cost reductions and strong demand for selected electric models.

The September 18 decline occurred before Volvo Cars announced Zellmer’s appointment on Sunday, September 20, so it cannot be interpreted as a market reaction to the incoming CEO. The next Stockholm trading session will provide investors’ first opportunity to respond directly to the succession news. Even then, any share movement will reflect the broader strategy update, industry conditions and market sentiment alongside the appointment itself.

The low valuation increases the pressure on Zellmer to demonstrate that Volvo Cars can generate acceptable returns on the capital already invested in electrification. Leadership changes can improve confidence, but the larger reassessment will depend on revenue growth, margins, cash flow and whether the company can reverse declining sales in China and other difficult markets.

What should Volvo Cars employees and investors watch before Klaus Zellmer takes over?

The first issue is whether Volvo Cars’ existing workforce reset proves sufficient. The company has already reduced approximately 3,000 positions under the SEK 18 billion action plan, and management said on September 17 that corporate overhead will continue to become leaner. No new large-scale layoff programme was announced alongside Zellmer’s appointment, but continued emphasis on productivity means employees will be watching whether the strategic reorganisation produces another phase of role consolidation.

The second milestone is delivery of the 13-car programme without rebuilding costs. Volvo Cars believes more platform sharing, greater parts commonality and regional product development can lower investment per new model, but those benefits must appear in future margins and cash flow rather than remain engineering assumptions. The targeted move from today’s low-single-digit profitability toward more than 8% EBIT is large enough that execution errors on even a few important vehicle programmes could materially affect the timeline.

The third issue is the leadership handover itself. Zellmer will assume the CEO role no later than October 1, 2027, giving Volvo Cars an unusually long period in which Samuelsson and the board can transfer relationships, strategic knowledge and responsibility. That overlap could reduce disruption, but it also means investors will expect clear accountability for which decisions belong to the current management team and which strategic changes will wait for the new chief executive.

Volvo Cars is therefore handing Zellmer a company that has already completed much of the painful first stage of restructuring but has not yet proved the financial outcome. Samuelsson returned to remove thousands of positions, lower costs, regionalise manufacturing and create a strategy designed around flexible electrification and deeper Geely collaboration. The next CEO must turn those structural changes into growth while managing a workforce of roughly 42,600 employees, a 13-model product programme and an earnings target far above the 1.1% margin reported in the latest quarter.

For employees, the appointment offers longer-term leadership visibility after an extended period of restructuring and strategic change. For shareholders, however, Zellmer will ultimately be judged against a much more demanding benchmark: whether Volvo Cars can move from emergency cost discipline to sustainable premium-vehicle economics while operating across increasingly divided Chinese, European and North American markets. His appointment answers who will lead the company after Samuelsson; the harder question is whether the structure Samuelsson leaves behind is capable of delivering the profitability Volvo Cars now promises.