Volvo Automobiles mentioned on Tuesday the provision of microchips had improved going into the fourth quarter, because it posted its first quarterly report after itemizing its shares publicly final month.
The Gothenburg-based producer, majority owned by China’s Geely Holding, mentioned preliminary gross sales volumes have been round 52,000 automobiles in November, down year-on-year resulting from decrease manufacturing and build-up of in-transit stock.
It added that offer was nonetheless restrained, however that manufacturing had “improved month by month” since September, whereas the provision of automobiles was nonetheless decrease than demand.
“The provision state of affairs has improved going into the fourth quarter, however we count on the industrywide scarcity of semiconductors to stay a restraining issue,” CEO Hakan Samuelsson mentioned in an announcement.
Volvo Automobiles confirmed a beforehand introduced third-quarter working revenue determine of three.3 billion Swedish crowns ($363.8 million), versus 4.6 billion within the year-ago interval, and revenues down 7 p.c to 60.8 billion crowns.
The automaker’s Ebit margin within the quarter dipped to five.5 p.c versus 6.9 p.c throughout the identical interval final 12 months.
Volvo had beforehand warned that gross sales volumes within the second half might fall year-on-year due to the chip disaster. The automaker maintained its full-year outlook of gross sales quantity and income development with improved profitability to pre-pandemic ranges.
Like a number of different automakers Volvo, whose shares have surged virtually 30 p.c because the inventory market debut on Oct. 29, has been compelled to chop manufacturing resulting from a world scarcity of semiconductors.
When requested to place a quantity on the monetary influence of the chip disaster on Volvo’s enterprise within the quarter, Chief Monetary Officer Bjorn Annwall mentioned the loss in manufacturing price Volvo 2.2 billion crowns ($242.7 million) in contrast with the identical interval final 12 months. That, nonetheless, was offset by higher pricing on the fashions it bought within the quarter, offering a 2.6 billion crown increase, leading to a 400 million crown web acquire.
Volvo has been in a position to keep its robust gross sales and earnings regardless of not having debuted an all-new mannequin because the XC40 was launched in 2017.
Since then, Volvo has been upgrading its present fleet and offering derivatives such because the full-electric model of the XC40 and its sleeker full-electric sibling, the C40.
Annwall mentioned Volvo’s success regardless of a slowdown in its new product cadence underlines the shift the trade is present process.
“It was that you just wanted new sheet metallic to point out [you had] a brand new automobile. Now we’re placing the funding in electrifying the powertrain, and we’re upgraded to Android for the infotainment with Google service similar to voice assistants and the maps,” Annwall mentioned. “That is one thing that actually retains the automobile contemporary in shoppers’ minds.”