Sell less, but more expensively: At Volvo Cars and Mercedes-Benz, shortages of semiconductors have limited car production and sales but profitability has improved.
The Swedish manufacturer, owned by Chinese Geely, continued to suffer in the fourth quarter from the effect of supply shortages: sales fell 20% in volume, to 168,000 vehicles sold, according to results presented on Friday.
But the decline in turnover was less (-6% to 80 billion crowns, or around 8 billion francs) due to “the strong demand” which had “a positive effect on the prices and the sale of more expensive cars,” Volvo said.
For the full year 2021, Volvo Cars posted solid results, with a 7.3% increase in turnover, to 282 billion, and a strong rebound in net profit. The latter reached 14.2 billion, against 7.8 billion in 2020, marked by the economic effects of the pandemic.
Its profitability also strengthened, with the operating margin increasing by 4 points to 7.2%.
In Germany, Mercedes-Benz beat expectations in 2021, posting record fourth-quarter profitability of 15% for its automotive arm, again thanks to “solid pricing” — read: more expensive car sales.
According to a press release from the German group on Friday, total sales fell by 5% last year but sales of the S-Class limousine rose by 40% and those of the very luxury brand Maybach by 50%, to reach a new record. .
The operating profit of the “Cars and Vans” activity should then be for the year 2021 “in the order of magnitude of 14 billion euros” against 6.8 billion in 2020 and 6.2 billion in 2019, according to the group, which will present its full results on February 24.
The announcement was welcomed on the stock market, where the action of the German group, which recently separated from its heavyweight division, took 6.02% to 73.95 euros around 1:20 p.m. GMT.
‘Uncertainty’ for Volvo
Volvo Cars shares lost 3.6% to 71 crowns, net profit of 2.3 billion euros in the fourth quarter, down 60%, disappointing analysts.
After a 2020 hit by Covid-19, “the market expected pent-up demand to drive sales growth in 2021,” the group noted in its report.
With 698,700 cars produced in 2021, the group failed to beat its 2019 production record (705,452 cars).
“Looking ahead, uncertainty remains high. Although the shortage of components has eased somewhat, we believe the supply chain will remain a limiting factor,” Swedish automaker CEO Håkan Samuelsson warned in a statement. a statement.
Volvo Cars, which aims to get out of the combustion engine and wants to be all electric by 2030, is currently investing to increase its production capacity in electric.
Earlier this week, the group announced that it was investing nearly one billion euros in its historic Gothenburg factory in Sweden to switch to the production of electric cars.
The manufacturer is also planning another major project with the construction with the Swedish battery specialist Northvolt of a joint plant, also near Gothenburg.
The latter should eventually employ 3,000 people, and will be added to a Research and Development center as part of an investment of around 3 billion euros.
ats, awp, afp