Automotive Exports March 2022

Volvo Cars,
Mercedes
post boosting
revenue despite
supply snarls
Chinese-owned Volvo Cars and Mercedes
said their revenue rose but global supply
chain bottlenecks caused sales and profits
to fall in the last quarter of the year.
Volvo Cars said the global shortage of
semiconductors – an essential tech
component in modern cars – caused sales
and profits to fall in the last quarter of the
year.
Retail sales fell by 20% to 168,000 units in
the fourth quarter of the year.
But revenue fell at a smaller rate, 6%, as
“strong demand had a positive effect on
prices and the sale of more expensive cars,”
while interest in electrified cars continued
to grow globally.
Revenue fell to 80 billion kronor ($8.6
billion) from the same quarter in 2020
while net profit sank by 60% to 2.3 billion
kronor.
Owned by Geely, the Sweden-based
carmaker said the semiconductor shortage
worsened in the second half of 2021.
“The result was a year of two halves,” Volvo
Cars said in an earnings statement.
“During the first half, the market was
up by double digits but abruptly stalled
in the second half due to COVID-19-
related shutdowns in Southeast Asia and
other semiconductor-related production
disturbances,” it said.
The picture was brighter for the full year,
with revenues jumping by 7% to a record
282 billion kronor.
Net profit soared to 14.2 billion kronor,
nearly double the 2020 figure.
Profitability also rose, with its operating
margin rising by four percentage points to
7.2%.
“2021 was a year to be proud of for
Volvo Cars,” said chief executive Hakan
Samuelsson.
“Looking ahead, uncertainty is still high.
While component shortage has eased
somewhat, we expect the supply chain to
remain a restraining factor,” he warned.
Volvo Cars, which plans to sell only fully
electric models by 2030, said the share of
sales of rechargeable vehicles – including
plug-in hybrids – grew to 34% in the
fourth quarter.
‘Solid net pricing’
In Germany, Mercedes-Benz beat
expectations with a record profitability
margin of 15% in the final quarter of
2021 “driven by solid net pricing” – or
the ability to sell its cars for higher prices.
To some extent, automakers were able to
use chips in their most profitable cars.
If Mercedes-Benz’s overall sales slid 5%
last year, those of its S-Class sedans rose
by 40% and its luxurious Maybach brand
by 50% to a new record.
“Our focus on profitable growth and cost
discipline combined with a desirable
product lineup translated into strong
financial performance,” chief executive
Ola Kallenius said in a statement.
Operating profits at the company’s car
and vans division is expected to come in
around 14 billion euros, compared to 6.8
billion in 2020 and 6.2 billion in 2019.
March 2022 36