8:03 am, February 13, 2023
Volvo expects double-digit growth in new car sales this year, ‘provided there are no unexpected supply chain disruptions’.
The Chinese-owned Swedish brand announced on Friday (Feb 10) that earnings before interest and taxes (EBIT), excluding its engine joint venture with owners Geely, fell 15.7 per cent to 17.9bn SEK (£1.4bn) in 2022.
Volvo put the cause for the lower EBIT performance down to supply constraints, shortage of components including semi-conductor chips, and higher freight costs.
Operating margins came to 5.4 per cent during the year, while revenues were up 17 per cent to 330.1 bn SEK (£25.8bn) – a new record for the company.
Fourth quarter profit operating income, meanwhile, fell to 3.4bn SEK from 3.7bn SEK in Q4 2021.
In a statement, Volvo said: ‘While 2023 looks to be another challenging year, the company is hopeful that the Covid-related supply shortages from China are behind it and that it continues to see steady improvement in the supply of semi-conductors.
‘In addition, Volvo Cars is optimistic that the price of lithium will start to decline towards the end of the year, in line with many of the independent reports recently published.
‘Despite the global turbulence, uncertainty and the recent price increases, Volvo Cars continues to see healthy demand for its cars.
‘As ever, the company continues to closely monitor the external environment and adapt accordingly.’
Volvo said it’s aiming to increase profitability by eight to 10 per cent by the middle of the decade, as well as reach a 50 per cent global sales share of electric Volvos.
The company also said it expects to see a double-digit growth in retail sales during the year, provided there are no unexpected supply chain disruptions’, as well as increase EV volumes above 2022’s 11 per cent share of its mix.
This year Volvo will launch the EX90 larger SUV as well as reveal a new small fully-electric SUV.
In the UK, 2023 will also see the brand rolling out its agency sales model.
The UK network is expected to switch over to agency sales in June.
This month marks one year since Volvo launched its purely online direct-to-consumer used car sales platform.
Volvo Cars Selekt Direct was launched after consumer research said buyers found the direct-to-consumer used car online concept ‘very appealing’.
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