Volvo Cars expects lower wholesale volumes this year as it reported a drop in third-quarter operating profit, hit by higher costs and lower volumes.
While manufacturing output continued to improve in the third quarter, the pace of production normalization was slowed by power outages and COVID-19 related lockdowns in China, the automaker said Thursday.
Volvo now expects 2022 wholesale volumes to be “slightly lower” compared with the year before, down from a previous forecast for better wholesales volumes than in 2021.
‘Punative’ chip prices
In addition, Volvo said it had been forced to conduct spot buying of semiconductors to fill production shortfalls.
“For the ones that are in extremely high demand and extremely low supply you are going to be a multiple that is punitive,” Volvo CEO Jim Rowan told Automotive News Europe. “On the other ones, you can you pay a premium on the base price, but it’s not prohibitive.”
When asked what Volvo is doing to offset this Rowan said earlier this year the automaker created a “spot market team” within its purchasing group to track prices so Volvo could can take advantage when prices drop.
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