Volvo posts better-than-expected results despite supply issues

On Thursday, Swedish car manufacturer Volvo Cars on Thursday announced better-than-expected quarterly results despite supply chain problems linked to the war in Ukraine and the Covid pandemic.

Volvo posts better-than-expected results despite supply issues
Volvo's factory in Torslanda outside Gothenburg. Photo: Adam Ihse/TT

The Gothenberg-based company, majority owned by China’s Geely Holding, said net profit rose to 3.9 billion Swedish kronor (380 million euros, $400 million) against 5.7 billion kronor a year earlier.

Its first-quarter operating profit fell to 6.0 billion kronor, while turnover rose 11 percent to 15.7 billion kronor, beating analyst forecasts.

A global shortage of semiconductors has forced Volvo and other carmakers to cut vehicle output despite robust demand.

The new Covid lockdowns in China and the Russian invasion of Ukraine have exacerbated the problem, Volvo said.

The Ukraine conflict “sent already rising inflation to new heights and further disrupted supply chains that were already fragile”, Volvo chief Jim Rowan said.

“Volvo Cars sold a total of 148,295 cars in the first quarter as the supply chain constraints affecting the company continued to slowly ease,” a statement said.

This was 37,000 fewer than the previous year.

“However, late in the quarter the company was hit by a shortage of a specific component, which will also impact production during the second quarter,” it added.

Volvo however underscored that this was “a temporary setback”, adding it expected “marginal growth in sales volumes for the full year 2022, compared to 2021, although uncertainty is high”.

Volvo sales in its main markets fell 26 percent in Europe, 21 percent in China and 16 percent in the United States.

However, the company, which aims to have an all-electric fleet of cars by 2030, said sales of rechargeable vehicles were rising and represented 34 percent of the total volume in the first quarter.

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SAS pilot unions delay strike for three days of extra talks

Sweden’s pilot union has agreed to postpone the strike planned for Wednesday by three days in the hope of striking a last minute deal with the SAS airline.

SAS pilot unions delay strike for three days of extra talks

The strike, due to start on June 29th, has been pushed forward until just after midnight on July 1st, to provide time for extra negotiations with the Scandinavian airline’s management over a new collective bargaining agreement. 

After weeks with intensive negotiations over a new agreement between SAS leadership and 1,000 of the airline’s pilots, both sides are now willing to continue discussions, pushing back the deadline by three days. 

“SAS and the Norwegian pilot union are in agreement that we will continue negotiations for three days,” Norwegian national mediator Mats Wilhelm Ruland said. “There’s been intensive work towards finding a solution.”

Karin Nyman, Swedish press officer for SAS, said that the company was glad to have been given more time.

“It means above everything else that our customers will be able to travel over the next few days,” she told Swedish newswire TT.

Martin Lindgren, chairman of the Swedish SAS branch of the Swedish Air Line Pilots Association (SPF), would not comment on the content of the negotiations, but said that it was worth continuing to try and reach an agreement.

“We feel a great responsibility towards both SAS and our members, but above all towards our passengers,” he said in a press statement.

“Although we have gone to great lengths to come to an agreement, many issues remain unsolved. The strike can only be avoided if SAS show a real will to meet us. As of now, we’re choosing to give the other side yet another chance to do that.”

The airline’s Danish press officer, Alexandra Kaoukji, wrote in a statement to Danish newswire Ritzau that mediators believe “there is a possibility of reaching consensus” on a new agreement between the airline and pilots.

“The new 72-hour deadline means that our passengers will be able to travel,” she told the newswire. “We’re very happy about that. Our hope is therefore that we can find a solution and that passengers will not be affected.”

Nyman was also hopeful that both sides would be able to come to an agreement without resorting to strike action.

“We can only state that we’ve had constructive talks in recent days in our negotiations, and obviously the mediators have then made the assessment that there is a chance of reaching an agreement,” she said.

Pilots are unhappy that SAS is hiring new pilots on cheaper contracts in their two subsidiaries, SAS Link and SAS Connect. If the two parties cannot come to an agreement, up to 30,000 SAS passengers could be affected per day, the airline said on June 27th.