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The Volvo Group has said chip shortages and supply chain grunts will continue to limit truck manufacturing, leaving the Swedish automaker with no choice but to turn away some customers.
Interruptions and shutdowns in truck production and other parts of the group will continue, Volvo said on October 21. The company reported third-quarter adjusted operating income of $ 1.1 billion, beating analysts’ average estimate.
The supply situation characterized by “disruption, unpredictability and a lack of freight capacity” is delaying deliveries to customers, Volvo CEO Martin Lundstedt said in a telephone interview.
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“We’re talking about at least a few more months, and in some regions and segments it could be considerably longer than that,” he said. “This is also why it is important for us to now manage the order board together with the order intake.
Volkswagen AG’s Traton SE warned last month that the component shortage will lead to lower sales in the third quarter and will also affect business next year. Volvo, on the other hand, had said commodity and chip constraints had improved in the three months leading up to September.
Volvo managed to boost sales in the third quarter, but chip crunch and additional supply chain issues forced the company to shut down production for “about a few weeks,” Lundstedt said on a call to results. While demand is strong in Europe and North America, the automaker delivered slightly fewer trucks than in the three months to June.
Volvo has cut its forecast for the truck market in Europe and North America this year by 30,000 units. He expects further market growth in 2022.
The automaker also warned of problems in China, where the construction equipment market is “down sharply” after several years of strong demand.
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