Helena Soderpalm

STOCKHOLM – Volvo Cars has warned that the industry-wide shortage of semiconductors will continue through next year. Its first quarterly report, which was published on the stock markets a month earlier, confirmed a drop in revenue and profit.

Gothenburg’s carmaker stated that supply chain constraints were still limited, but that production was improving month-by-month since September.

“The supply situation has improved going into the fourth quarter, but we expect the industry-wide shortage of semi-conductors to remain a restraining factor,” Chief Executive Hakan Samuelsson said in a statement.

Volvo’s Oct. 29 initial public offering (IPO), was the largest in Europe this year. This is a strong sign for Europe’s automotive industry, which is currently undergoing a difficult transition to electric cars (EVs).

Volvo was one of many global automakers to have cut production because there is a shortage in chip supply. Bjorn Annwall, Chief Financial Officer, said that he expects this to be the main issue for the fourth quarter.

He told Reuters that there were no additional lockdown-related problems.

Volvo is majority-owned by China’s Geely Holding. In November, preliminary sales volume was around 52,000. This decrease in year-on-year numbers can be attributed to lower production levels and an increase in in-transit inventories.

It announced a third-quarter operating profit number of 3.3bn Swedish crowns ($362.6m), which was lower than the 4.6billion reported in year-ago. Revenues decreased 7% to 60.8bn crowns.

The company also retained its full year outlook on sales volume growth and revenue growth, as well as improved profitability to prepandemic levels.

Volvo Cars shares fell by 2.9% during early trading, after a surge of almost 30% since the stock exchange debut.

By 2030, the company will be a completely electric vehicle manufacturer. Polestar is owned by 49% of the company. The firm announced in September that it will go public with a $20 billion deal.

($1 = 9.1009 Swedish Crowns