Polestar, a global leader in the automotive industry, has just reported a stellar set of financial results for the first nine months of its fiscal year. The company has doubled revenue compared to the same period last year, while losses have narrowed by 11%.
After years of struggling with heavy debt and lackluster results, Polestar has finally hit its stride. The company had been aggressively cutting costs over the past three years and this turnaround is evidence that these efforts are paying off. This seems to be a prime example of how Chinese conglomerates can do well even in a tough economic climate if they stay committed to their core business and make strategic decisions at pivotal times.
Polestar has enjoyed strong sales in China and its services business, which has seen growth of more than 20% year on year, is flourishing. The company also makes cars for Volvo Cars, and the new S60 was launched there last year. Last month, Polestar even announced plans to launch a new plant for making cars in China . According to Polestar president Peter Horbury , “China is the cornerstone of our future strategy.”
CEO Thomas Ingenlath said that “the first nine months of 2013 saw an acceleration in the pace at which we are growing our volume.” He added that “we will remain focused on increasing adjusted EBITDA per share by at least 10% every year going forward. We will build on our strengths in China, Europe and North America.”
The results show that Polestar has not only managed to generate strong revenue without heavy debt, but it also holds a number of other strategic advantages. The company is supported by a diverse range of services offerings, including design and engineering, car production and parts supply, as well as customer support services. Polestar also has access to Volvo’s skilled workforce in both China and Sweden. To compound things further, the company has access to the funds generated by Volvo Cars’ parent company Geely Holding Group , which is led by Chinese billionaire Li Shufu .
