Volvo Cars sales in December decline due to chip shortage

Volvo Cars saw their sales decline 18.1% in December due to global component shortage, the automaker said on Wednesday.

Volvo has said before that the chip shortage crisis would continue into 2022.

Global sales at the firm declined to 64,436 cars in December, with sales in Europe dropping 15.1%, while they declined 26.7% in the United States.

The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic in 2020, rival against the sprawling consumer electronics industry for chip supplies. A factory fire suffered by Japanese chipmaker Renesas in 2021 is also cited as a reason behind the chip shortage.

“The result was significantly influenced by continued component supply shortages, which affected production and consequently deliveries to consumers,” the automaker said in a statement, adding that demand for its products remained strong.

The automaker’s 2021 full-year outlook is for sales volume and revenue growth with increased profitability to pre-pandemic levels. It is yet to post fourth-quarter earnings on February 11.