Volvo sees supply situation improving after Q3 profit drop

Automotive Industry

Source: Automotive News Europe, 2021-11-30

Volvo Cars said on 30 November the supply of microchips had improved going into the fourth quarter, as it posted its first quarterly report after listing its shares on the stock exchange in October 2021.

The Gothenburg-based manufacturer, majority owned by China's Geely Holding, said preliminary sales volumes were around 52,000 cars in November, down year-on-year due to lower production and build-up of in-transit inventory.

It added that supply was still restrained, but that production had "improved month by month" since September, while the supply of cars was still lower than demand. 

"The supply situation has improved going into the fourth quarter, but we expect the industrywide shortage of semiconductors to remain a restraining factor,” CEO Hakan Samuelsson said in a statement.

Volvo Cars confirmed a previously announced third-quarter operating profit figure of 3.3bn Swedish crowns ($363.8m,) versus 4.6bn in the year-ago period, and revenues down 7% to Kč 60.8bn.

The automaker's Ebit margin in the quarter dipped to 5.5% versus 6.9% during the same period in 2020.

Volvo, which had previously warned that sales volumes in the second half could fall year-on-year because of the chip crisis, maintained its full-year outlook of sales volume and revenue growth with improved profitability to pre-pandemic levels. Like several other automakers Volvo, whose shares have surged almost 30% since the stock market debut on 29 October, has been forced to cut production due to a global shortage of semiconductors.

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