Supply slips slap Volvo sales

General Motors hasn’t yet taken the step of predicting when the global supply shortfall might experience long-term stability, but Volvo Cars is taking a crack at it. First, Volvo reported August 2021 sales of 45,786 new cars, representing a drop of 10.6 percent over the same period last year. Like GM, Volvo is attributing the drop to supply issues that have cramped its ability to produce new cars. The Volvo-specific problem currently is a directly COVID-associated supplier shutdown in Malaysia, which in turn forced temporary production halts at Volvo Cars assembly plants in Sweden, Belgium, China, and most recently, at its U.S. facility in Ridgeville, South Carolina, near Charleston, which is already scheduled to become the first Volvo plant to adopt all-EV production.

At Volvo, and elsewhere, there’s evidence that the supplier shortage is temporary and that the long-term market forecast – essentially, remediating pent-up demand from the pandemic that’s now been percolating for close to two years – reflects solid fundamentals. Volvo cars predicts that once supplies stabilize, sales in the second half a 2021 should at least match last year’s pace. Despite the slowdown, models from the Recharge line of electric-capable vehicles still accounted for 47 percent of Volvo Cars’ overall sales, in August, the highest such percentage ever, and global year-to-date sales for 2021 were up more than 26 percent over 2020 despite the recent supplier blips in Southeast Asia.

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