Volvo Cars Cuts 2022 Production Goal on Chip Constraints

(Bloomberg) -- Volvo Car AB warned it will struggle to meet its production forecast for this year as the shortage of semiconductors once again forces factories to a standstill. 

The disruption is expected to last through the second quarter because of issues procuring a specific type of chip, the Swedish-Chinese carmaker said Tuesday. Volvo now expects only “marginal” growth in deliveries this year, after previously saying sales volumes would rise. 

While Russia’s war in Ukraine has exacerbated supply-chain disruptions in the automotive industry, Volvo said its issues were not related to the invasion. Volvo had previously said that the supply of semiconductors, as well as production, was gradually improving. Carmakers globally have repeatedly idled factories over the lack of chip supplies, leaving them unable to make enough vehicles as demand recovered as economies started to recover from the pandemic.

Earlier Tuesday, local daily Goteborgs-Posten reported that the company has decided to cancel five shifts in its Torslanda factory, which makes the XC60 and XC90 sport utility vehicles.

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