Investing.com - Volvo (OTC:VLVLY) Cars (ST:VOLCARb) has posted a 3% drop in overall sales in December, due in part to weak demand for some of its hybrid vehicles, according to figures released by the automaker on Tuesday.

Total (EPA:TTEF) sales for the final month of 2024 came in at 73,804, down from 76,015 in the year-ago period, the Sweden-based group said in a statement.

Sales of mild hybrid cars with only internal combustion engines dropped by 23% in Europe and 10% in the US. In China, the world's largest automotive market, the number slipped by 6% to 13,407 units. Worldwide, sales of these cars declined by 16% to 39,769.

However, Volvo Cars, which is majority-owned by China's Geely Holding, posted a 20% uptick in electrified models. These include both fully-electric and plug-in hybrid offerings.

Meanwhile, in the twelve months ended in December, total sales increased by 8% to 763,389 units, fueled by a jump in demand for electrified models which helped offset a 7% dip in sales of mild hybrids. Sales of fully electric options, in particular, surged by 54% to 175,194.

Stockholm-listed shares in Volvo Cars moved higher in early trading on Tuesday.

In October, the firm slashed its full-year sales growth forecast, with CEO Jim Rowan warning in an interview with Reuters that high inflation was contributing to a slowdown in consumer sentiment. Electric vehicle manufacturers are also facing stiff competition from lower-priced Chinese rivals, and are awaiting the impact of European tariffs on EVs made in China.

Volvo Cars previously flagged that the weakening in demand was beginning to dent the premium automotive market, possibly weighing on the firm's profit margins. The business has scaled back its targets for electrification as well, choosing instead to focus on selling new hybrid models.

(Reuters contributed reporting.)

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