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(Reuters) – Swedish automaker Volvo Cars expects lower wholesale volumes this year, it said on Thursday as it reported a drop in third-quarter operating profit, hit by higher costs and lower volumes.
While manufacturing output continued to improve in the third quarter, the pace of production normalisation was slowed by power outages and COVID-19 related lockdowns in China, it said.
The Gothenburg-based company now expects 2022 wholesale volumes to be “slightly lower” compared with the year before, down from a previous forecast for better wholesales volumes than in 2021.
In addition, Volvo said it had been forced to conduct spot buying of semiconductors to fill production shortfall and logistics costs, in addition to mounting raw material costs that all hurt its operating profit.
Despite robust demand throughout the year, a global shortage of semiconductors has forced Volvo and its peers to curtail vehicle output. Only this week, the shortage saw Volvo having to shut one of its Swedish factories for a week.
Stockholm-listed Volvo, majority owned by Chinese automotive company Geely Holding, said its quarterly operating profit fell to 2.1 billion Swedish crowns ($193.41 million) from 3.3 billion a year ago.
The company aims for 50% of its sales to be pure electric cars by the middle of the decade amid an industry-wide shift in which auto suppliers have to shoulder extra costs while already squeezed by rampant inflation and soaring energy prices.
It reaffirmed its goal of 50% fully electric cars in its third-quarter report.
($1 = 10.8579 Swedish crowns)
