Volvo Cars today reported a stable financial performance for the first quarter 2022. The stabilization was due to gradual effects from market disturbances caused in part by the war in Ukraine, and the Covid-19 lockdowns that took place in Asia.
In the first months of 2022, the conflict in Ukraine has claimed the lives of millions of people and forced them to flee their homes. Jim Rowan, chief executive officer of Volvo Cars, stated that the same war has also pushed already high inflation to new heights, disrupting already fragile supply chains. I am extremely pleased with Volvo Cars’ performance in the first quarter.
The interim report for quarter one, which is available here, shows that Volvo Cars revenue was SEK 74.3 billion, up from SEK 68.5 billion in the same period last. Volvos core operations had an EBIT of SEK 5.9 billion, or 7.9%. The reported EBIT was SEK 6 billion, or 8.1%.
Volvo Cars sold a total number of 148,295 cars during the first quarter. This was despite the supply chain constraints that continued to ease. The company was however hit by a shortage in a particular component late in the quarter, which will also affect production during the second quarter. Volvo Cars considers that this is a temporary setback. They expect the supply chains to improve in second half of the year. The company anticipates a slight increase in sales volume for the full year 2022 as compared with 2021, but uncertainty is high.
Customers continue to love Volvo Cars plug in hybrid and fully-electric Recharge models. The share of electrified cars also continues to grow. Recharge sales represented 34% of total sales during the first quarter. Fully-electric cars accounted to 8% of total sales, which is more than the doubling of the previous two quarters. This share will grow as we increase our annual production capability of fully-electric cars to 150,000 units by summer. Volvo Cars anticipates a continued high level of fully electric vehicles in the future.
The number active subscriptions rose by 174% in the quarter, compared to the previous year. This was due to customer demand and a wider offer, including online fleet sales for small and mid-sized enterprises. The UK and Sweden introduced these sales. Online sales accounted 13 percent of total sales to established markets in the first quarter.
Volvo Cars efforts are moving in the right direction to reduce its CO2 footprint per vehicle. The company’s 2020 goal of a 40% reduction in CO2 emissions per car was supported by 13.4% CO2 emissions in the first quarter compared to 2018.
Jim Rowan said that the strategic direction remains clear and in focus. Our goal is to be the fastest transformer of the industry, an electric brand with direct consumer relationships and lower carbon emissions. To reach our goals, we will accelerate product development, improve the resilience of the supply chain, and increase our digital and coding capabilities.
SOURCE: Volvo Cars