Volvo Cars reported this week a smaller-than-expected fall in first-quarter operating profit, but said the ​impact of a pull-back of subsidies and other developments in the ‌United States had been worse than expected.

“We are not satisfied with our results … but despite a volume drop coming from external factors we are more or less ​flat in profitability … which I think is really well done internally ​with all the factors we can control,” CEO Hakan Samuelsson ⁠told Reuters.

The Sweden-based group, which is majority-owned by China’s Geely Holding, said ​it expects second-quarter profitability to be affected by continued headwinds and the ​production ramp-up of its new electric EX60.

“You can of course wish for a better market from the external world but we will now just concentrate in the second half ​of the year to come back to growth,” Samuelsson said.

Operating profit ​was 1.6 billion crowns ($172.4 million) against a year-earlier 1.9 billion, on an 11 per cent sales drop, ‌with ⁠a gross margin of 18.5 per cent.

Analysts at Handelsbanken, Bernstein and JPM said the profit drop was smaller than expected, citing a consensus of 900 to 950 million crowns.

Volvo Cars said its cost cuts under a programme launched a ​year ago, and the ​fact it ⁠had kept its market share in the premium segment in Europe, supported profits.

However, Samuelsson said that it had been ​more severely impacted in the US than anticipated, as ​a critical $7,500 ⁠tax break for buyers was removed, which also impacted its plug-in model lineup in addition to its EVs.

The group had earlier warned that profit would be ⁠negatively ​impacted by tariff-related costs, currency translation effects, tough ​competition and geopolitical tensions.

Volvo Cars repeated that it aims for increasing group sales volumes in ​the full year.