The feast of vehicles is over – but the giant's share has a 20% advantage

"The automotive industry has In recent years, Sweden has experienced a strong expansion. This led to a sharp increase in exports. At the same time, the car industry has been an important driver for the creation of new jobs, mainly in the Gothenburg region, but also for Sweden as a whole, "said Katarina Lundahl, economist in the EU economy. .

"But we are now seeing clear signs of a trend breaking both in terms of employment and prospects for the industry."

Sweden's largest union The Union, which has more than 650,000 members, released its latest economic forecast on Wednesday. The main message is that it still works well for the Swedish economy, but that economic growth is expected to deteriorate significantly over the next year. The risk of a significant reduction in the number of housing, announced recently by Di, is the main reason.

But the union giant also points out that the growth of the auto industry seems to slow down. Union clubs in the auto industry would signal a clear change in climate. Growth in order intake has slowed considerably and sales prospects are down. And for the first time in three years, the union expects that the number of employees in the auto industry will not increase over the next six months.

Volvo Volvo car manufacturer Cars, however, sign a much more positive image.

"We are still waiting for stable growth for Volvo Cars in the years to come. Last year, we recorded a record business figure of 571,000 cars worldwide and by 2018, our growth will continue, "said Stefan Elfström, head of press.

Thanks to this success, Volvo Cars has increased the number of employees in Sweden from 16,000 in 2014 to 24,500 today.

"And we still need to recruit skilled engineers to develop new technologies for electric, connected and self-propelled cars, but we can not predict the number of new jobs this may mean."

AB Volvo, which is Sweden's largest industrial enterprise and one of the world's largest truck manufacturers, refuses to comment on the union's report.

Hampus Engellau, an analyst at Handelsbanken in the automotive sector, points out that he shares the image that the growth of the automotive industry has declined.

"And in fact, we have already made a fairly fair price adjustment in the third quarter and we have weighted cyclical stocks, which generally belong to the automotive industry and its suppliers."

AB Volvo also had a good unfavorable stock market wind and the value of the company has declined by about 10% since the beginning of the year. Hampus Engellau believes, however, that the share of the stock market is very advantageous, provided that there is no intensification of the trade war or other major events in the world economy.

"Volvo's valuation is very attractive and has at least a maximum value of 20%." It's probably also the context in which the members of management were eager to buy stock. "

What does that tell you?

"The valuation is now based on the history of Volvo, where profitability fell as the economy deteriorated, but Volvo's structure is different: it offers greater resilience, while volumes seem quite stable in 2019. "