‘Really Annoying’ Chip Shortage Constrains Volvo Before IPO
(Bloomberg) -- Volvo Cars’s chief executive officer offered an unusually candid take on the chip shortage stifling the global auto industry, airing frustration about the supply issue before a potential stock listing.
The Chinese-owned Swedish carmaker reported record first-half results Friday, including a 41% surge in vehicle sales. While CEO Hakan Samuelsson expects deliveries to be roughly flat in the second half, he said scarce semiconductor supplies are to blame for the lack of growth.
“It’s really annoying because we have a lot of customers wanting to buy our cars,” Samuelsson said in an interview with Bloomberg Television. “We would like to build more and sell more. We don’t see really that that’s going to improve.”
Volvo’s first-half operating income soared to 13.24 billion Swedish kronor ($1.5 billion) from a 989 million-kronor loss a year ago. Revenue jumped 26% to 141.1 billion kronor.
“If you look at the car market and demand from customers, it’s very strong -- it’s surprisingly strong considering the pandemic,” Samuelsson said in a separate interview. “We are seeing this continuing for the second half of the year.”
Volvo could be on the verge of a Nasdaq Stockholm stock exchange debut later this year, more than a decade after Zhejiang Geely Holding Group Co. acquired the Swedish company in the midst of the great recession. Geely’s CEO said last month he expects a listing to move quickly and for Volvo to attract a good valuation in part because of its decision-making autonomy in China.
Earlier this week, Volvo announced an agreement to take control of its China ventures from Geely. The deal will make Volvo the first foreign conventional carmaker to gain full control over its Chinese operations.
Samuelsson, 70, isn’t alone in his dissatisfaction with chip supplies.
“We are very sad to see we have a stellar order book and are struggling to deliver that order book,” Stellantis NV CEO Carlos Tavares told the Detroit-based Automotive Press Association earlier this week. “People are buying cars like hell.”
Pricing for Volvo’s cars has been strong due to inventory constraints and efforts to prioritize its most profitable models, Chief Financial Officer Bjoern Annwall said in an interview.
“The rebates on cars are very limited right now,” he said.
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