Volvo Automobiles tackles materials and logistics prices to enhance manufacturing

Nevertheless, the carmaker mentioned that manufacturing output continued to recuperate within the third quarter, in comparison with the earlier one. Volvo made 145,000 automobiles between July and September, and bought 138,000. That confirmed a rise in manufacturing on the final quarter of round 9.4% (132,000 in Q2) however a drop in retail gross sales of 8% (143,000 in Q2). Volvo Automobiles made 169,000 automobiles in Q1 in opposition to gross sales of 148,000. 


Volvo mentioned unexpected components equivalent to energy outages and Covid-related lockdowns in China slowed down the sooner tempo of restoration in manufacturing that it was anticipating, however offered there have been no additional main provide chain disturbances, it expects to proceed its enhancing manufacturing run into This fall and the brand new 12 months.  

“Macroeconomic uncertainties around the globe weighed on our third quarter efficiency,” mentioned Jim Rowan, president and CEO. “However with a nimble and agile organisation, sturdy monetary place and ample liquidity, we’re assured we’ll tide over the continuing challenges.” 

The upper manufacturing output in comparison with gross sales quantity may point out the difficulties carmakers are dealing with in securing completed car supply capability, although Volvo Automobiles has given no indication of this.

Volvo mentioned it anticipated decrease wholesale volumes this 12 months than 2021 however it reported a robust demand for premium EVs. Gross sales of absolutely electrical Volvo automobiles rose by 87% year-on-year through the quarter, in comparison with the third quarter of 2021, making up 7% of whole gross sales. The carmaker mentioned that September was a robust month for EV gross sales, when Volvo Automobiles bought over 6,000 absolutely electrical fashions, representing greater than 12% of general gross sales, in contrast with a share of three.5% in the identical month final 12 months. The carmaker made 62,000 automobiles in September, of which 18% had been pure EVs. 

Volvo Automobiles will reveal its subsequent, absolutely electrical SUV – Volvo EX90 – on November 9 this 12 months. 

On-line gross sales and subscription 
On-line gross sales made up 6% of whole gross sales in Q3, which is down on the 8% seen in the identical quarter final 12 months however Volvo reported the variety of lively subscriptions beneath the Care by Volvo model rose by 67% within the quarter, in comparison with the identical quarter in 2021. Care by Volvo is the model’s subscription service, providing prospects entry to a spread of latest fashions in trade for a month-to-month fee. 

Volvo mentioned that by mid-decade it supposed to account for 50% of gross sales by means of on-line channels.  

“On-line gross sales present sturdy demand, although volumes are held again by low provide,” mentioned a spokesperson for Volvo Automobiles. “As manufacturing improves, we anticipate on-line gross sales as a share of whole quantity to once more improve within the coming quarters.” 

On-line gross sales got a lift through the Covid lockdowns and present difficulties in distribution imply the company mannequin, by which the OEM sells on to the shopper on-line for a set charge, is rising as an alternative choice to the conventional manner of doing enterprise. 

Nevertheless, Volvo was eager to elucidate that on-line gross sales can be pushed by demand from the buyer and that any desire by the buyer for conventional supplier mannequin gross sales can be met equally by help in that route. 

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