BERLIN, (Reuters) – Mercedes-Benz expects inventory levels to stay high during the second quarter. Supply chain bottlenecks hamper production and deliveries. The supply of semiconductors is still volatile.

Harald Wilhelm, Chief Financial Officer at Harald Wilhelm stated that there is a lot of vehicles blocked. However, some of those will be turned around and new ones will come,” Harald Wilhelm told analysts on Wednesday after Harald Wilhelm reported the first quarter results.

Wilhelm explained that while the company’s pricing strategy relies in large part on product scarcity and high volumes, the company could have sold more units in its first quarter without having to lower prices.

He stated, “It’s shame because the semiconductor environment puts a limitt.”

Wilhelm explained that around half the 1Billion Euros ($1.1 Billion) recorded in headwinds during the first quarter of 2017 was caused by raw material price rises. While the remainder is split between logistics and energy costs as well as inefficiency due to the need to stop production and restart it amid supply chain issues.

($1 = 0.9412 euros)