Volvo Cars to cut costs by $1.9 bln as earnings drop

STOCKHOLM, April 29 (Reuters) - Sweden-based Volvo Cars VOLCARb.ST launched cost cuts of 18 billion Swedish crowns ($1.87 billion) on Tuesday as its operating profit fell heavily amid difficult market conditions for the automotive industry.

Operating profit at the company, which is majority-owned by China's Geely GEELY.UL, was 1.9 billion Swedish crowns for the January-March period against a year-earlier 4.7 billion crowns.

The cost cuts, part of a new "cost and cash action plan", will include layoffs and a larger decrease in investment than earlier expected, the company said, adding that it had withdrawn its financial guidance for the next two years.

The company's share price fell to record-low levels in recent months as it grappled with mounting tariff pressures, the continued slowdown in electric vehicle (EV) demand and global uncertainty.

In a first sign that Volvo was taking steps to address the situation, the automaker made an unexpected management shake-up this month by axing CEO Jim Rowan and bringing back former CEO Hakan Samuelsson, and a few weeks later also replacing its CFO.

"Given the turbulence in the market, we need to further improve our cash flow generation and lower our costs," Samuelsson said in a statement on Tuesday.

"While we still have a lot to do, our direction going forward is focused on three areas: profitability, electrification and regionalisation," he added.

($1 = 9.6177 Swedish crowns)