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Volvo Cars Reinstates Hakan Samuelsson as CEO Amidst Turnaround Efforts

Volvo Cars Reinstates Hakan Samuelsson as CEO Amid Turnaround Efforts and Looming US Tariffs

In a surprising leadership shakeup, Volvo Cars has announced the return of Hakan Samuelsson as its chief executive officer, replacing Jim Rowan after just three years in the role. This move comes at a critical juncture for the Swedish automaker, which is grappling with a host of challenges including sluggish sales, supply chain disruptions, and the specter of heightened trade tensions under a potential second term for U.S. President Donald Trump. Samuelsson, who previously led Volvo from 2012 to 2022, is being brought back to steer the company through what executives describe as a necessary "turnaround" phase, emphasizing his proven track record in revitalizing the brand during turbulent times.

Samuelsson's earlier tenure at Volvo is often credited with transforming the company from a struggling subsidiary of Ford Motor Company into a premium player in the global automotive market. Under his leadership, Volvo invested heavily in electrification, safety innovations, and autonomous driving technologies, while also navigating the complexities of its acquisition by China's Geely Holding Group in 2010. He oversaw the launch of iconic models like the XC90 SUV and the Polestar performance brand, which helped boost Volvo's market share and profitability. By the time he stepped down in 2022, Volvo had positioned itself as a leader in sustainable mobility, with ambitious goals to go fully electric by 2030. His return signals a desire to recapture that momentum, especially as the company faces headwinds that have eroded its recent performance.

Jim Rowan, a former Dyson executive with a background in consumer electronics, was appointed CEO in 2022 to accelerate Volvo's digital transformation and EV ambitions. During his tenure, the company made strides in software integration and connected vehicle services, launching models like the EX30 compact electric SUV and expanding its subscription-based business models. However, Rowan's leadership has been tested by external pressures. Global economic slowdowns, particularly in key markets like Europe and China, have dampened demand for luxury vehicles. Volvo reported declining sales in several quarters, with production cuts and inventory buildups exacerbating financial strains. The company's stock price has also taken a hit, reflecting investor concerns over profitability in an increasingly competitive EV landscape dominated by Tesla, BYD, and emerging players.

A major factor in this leadership change appears to be the looming threat of U.S. tariffs on imported vehicles, especially those with ties to China. Volvo, majority-owned by Geely, manufactures a significant portion of its vehicles in China, including popular models exported to the U.S. market. With Donald Trump's potential return to the White House, there is growing anxiety about his "America First" trade policies, which could impose steep tariffs on Chinese-made goods. Trump has repeatedly vowed to protect domestic manufacturing by levying duties as high as 60% on imports from China, a move that could severely impact Volvo's U.S. operations. The company currently assembles some vehicles in South Carolina, but relies heavily on Chinese production for cost efficiency. Analysts estimate that such tariffs could add billions to Volvo's operational costs, forcing price hikes or market retreats that might alienate American consumers.

Samuelsson's reappointment is seen as a strategic pivot to leverage his experience in international diplomacy and supply chain management. During his first stint, he successfully navigated trade barriers and geopolitical tensions, including Brexit and U.S.-China trade wars under Trump's first administration. Insiders suggest that Samuelsson will prioritize diversifying manufacturing footprints, potentially ramping up production in Europe and the U.S. to mitigate tariff risks. This could involve accelerating investments in Volvo's Ghent, Belgium plant or expanding the Ridgeville, South Carolina facility, which already produces the S60 sedan and XC60 SUV. Additionally, Samuelsson is expected to refocus on core strengths like safety and Scandinavian design, while pushing forward with electrification goals amid regulatory pressures from the European Union to phase out internal combustion engines.

The decision has elicited mixed reactions from industry observers. Some praise it as a bold move to inject stability and expertise into a company at a crossroads, drawing parallels to other automotive turnarounds like Alan Mulally's revival of Ford or Carlos Tavares' stewardship of Stellantis. Critics, however, question whether bringing back a former leader signals a lack of fresh ideas, potentially stifling innovation in a rapidly evolving sector. Volvo's board, chaired by Li Shufu of Geely, emphasized in a statement that Samuelsson's deep understanding of the brand's DNA and his ability to foster cross-cultural collaborations make him the ideal choice for this moment. Rowan, meanwhile, will transition to an advisory role, ensuring continuity in digital initiatives.

Looking ahead, Volvo faces an uphill battle to regain its footing. The global EV market is becoming more crowded, with legacy automakers like BMW and Mercedes-Benz intensifying competition, while startups and Chinese rivals offer lower-priced alternatives. Economic uncertainties, including inflation and interest rate fluctuations, continue to suppress consumer spending on high-end vehicles. In China, Volvo's largest market, domestic brands like Nio and XPeng are eroding market share with advanced tech features. Samuelsson's immediate priorities will likely include cost-cutting measures, streamlining operations, and forging strategic partnerships—perhaps even exploring alliances with U.S. tech firms to bolster autonomous driving capabilities.

This leadership change underscores broader themes in the automotive industry: the interplay of geopolitics, technological disruption, and sustainability imperatives. As Volvo charts its course under Samuelsson's renewed guidance, the company's ability to adapt to trade volatilities and consumer shifts will be crucial. Success could reaffirm Volvo's status as a resilient innovator; failure might expose vulnerabilities in its Chinese-dependent model. For now, stakeholders are watching closely, hopeful that Samuelsson's second act will echo the triumphs of his first, steering Volvo toward a more secure and prosperous future in an uncertain world.

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Read the Full Fortune Article at:
[ https://fortune.com/europe/2025/03/31/volvo-car-brings-back-hakan-samuelsson-ceo-turnaround-jim-rowan-us-tariffs-trump/ ]