Stockholm, April 28 (BNA) Volvo Cars said on Thursday that chip restrictions are gradually improving after posting higher-than-expected profits as demand for its car group remained strong.
A global shortage of semiconductors has forced the Gothenburg-based automaker and its global peers to cut car production despite strong demand from potential car buyers.
Volvo said production fell at the end of the first quarter due to a temporary shortage of a specific semiconductor and warned that the supply problem was expected to continue into the second quarter.
The automaker’s first-quarter operating profit fell to 6.0 billion Swedish crowns ($607.4 million) from 8.4 billion a year earlier. Four analysts polled by Refinitiv expected an average of 4.13 billion profit.
Volvo, which is mostly owned by China’s Geely Holdings, maintained its 2022 forecast for marginal growth in year-over-year deliveries.
It said earlier this month that its auto sales fell 20% in the first quarter to 148,295 vehicles.
Volvo in February suspended all sales, service and production in Russia, which last year accounted for about 3% of the group’s net sales.