Volvo reduces 2022 sales expectations amid ongoing semiconductor shortage

Automaker Volvo Cars reduced its sales expectations for 2022, due to a temporary worsened production situation in the second quarter caused by the ongoing semiconductor shortage.

“Over the past year, the auto industry has been impacted by the shortage of semi-conductors and Volvo Cars has previously communicated that it sees a gradual improvement in the supply of semi-conductors and production output month over month,” it said, although it added that, due to a lack of a specific type of semi-conductor, it expected “a temporary deviation from that trend.”

It didn’t specify any number for 2022 growth projection. Volvo sold 698,693 vehicles in 2021, up 5.6% year on year.

It said the shortage was not related to the war in Ukraine, as it had “very limited direct relationships” with suppliers in the country.

However, the war had resulted in increasing costs for raw material, energy and freights in the auto industry and it was continuing to work with pricing to mitigate the effects, Volvo said.

“The supply chain constraints, including the ongoing impacts from COVID, are expected to remain a problem for the industry throughout 2022,” it said, adding that it would work with suppliers and partners to resolve any impact on production and to deliver vehicles to customers as soon as possible.

The ongoing semiconductor shortage has continued to impact some automakers, despite others expecting the situation to improve in 2022.

Fellow automaker BMW said previously that it expected supply chain issues, particularly the shortage of semiconductors, not to ease before the second half of 2022.

Earlier in March, Japan’s Toyota Motor Corp. said it expected to start its fiscal year 2022-23 (April-March), with a vehicle shortfall of 150,000 units globally in April, due to the semiconductor chip shortage and the effects of the coronavirus pandemic.

New passenger car registrations in Europe fell 6.7% year on year in February to 719,465 units, due to supply chain disruptions faced by automakers, according to data released by European automobile manufacturers’ association ACEA.

In addition, the chip shortage also contributed to Turkey’s vehicle output dropping 9% year on year in February to 105,644 units.

— Jacqueline Holman