Volvo to idle Gothenburg plant again over chip shortage

Automotive Industry

Source: Automotive News Europe, 2021-08-23

Volvo Cars will halt production at its Swedish plant in Torslanda, on the outskirts of Gothenburg, during next week due to the shortage of semiconductor chips, the automaker said.

A global chip shortage over 2021 has caused a major delay in manufacturing activity and forced several automakers to cut down on production.

"Due to the current material shortage situation, triggered by a combination of global semiconductor shortages and new COVID-19 outbreaks, Volvo Cars has decided to pause production in Torslanda for the week of 30 August 3 September," Volvo said in an emailed statement.

"Production is planned to resume on 5 September," the Swedish company, which had a similar interruption of output at its Gothenburg plant only two weeks ago, added.

Volvo, which in July 2021 reported the best half-year sales and operating profit in the company's 94-year history as demand for electrified cars grew, also warned in July that the ongoing shortage of microchips would negatively impact its results in the second half.

"The base scenario that we have is that the chip shortage will not improve, which means our sales and revenue growth in the second half will be flat compared with the second half of 2020," Volvo Chief Financial Officer Bjorn Annwall told Automotive News Europe.

Volvo is considering listing on the Nasdaq Stockholm stock exchange in 2021.

When asked whether the company's strong first-half performance would be beneficial as it gears up for a potential initial public offering, Volvo CEO Hakan Samuelsson told ANE the figures were the result of the company's push to lower its CO2 impact by rapidly shifting to electrification.Volvo wants full-electric cars to account for half of its global sales by mid-decade and to be an all-electric brand by 2030.


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