STOCKHOLM: Automaker Volvo Cars said on Thursday that chip constraints were gradually improving after posting profits above forecasts as demand for its range of vehicles remained strong.
A global shortage of semiconductors has forced the Gothenburg-based carmaker and global peers to cut vehicle output despite robust demand from prospective car buyers.
Volvo said production was down at the end of the first quarter due to a temporary shortage of a specific semiconductor and warned that supply problem was expected to remain in the second quarter.
The carmaker’s first-quarter operating profit fell to 6.0 billion Swedish crowns ($607.4 million) from 8.4 billion a year ago. Four analysts polled by Refinitiv had on average forecast a 4.13 billion profit.
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Volvo, majority owned by China’s Geely Holding, maintained its forecast for 2022 of marginal year-on-year growth in deliveries.
It said earlier this month that its car sales fell 20% in the first quarter to 148,295 cars.
Volvo in February suspended all sales, service and production in Russia, which last year accounted for about 3% of its net group sales.
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