Volvo Cars’ fourth-quarter profit shrinks, 2023 expected to be a challenging year

Volvo Cars (VOLCARb) on Thursday reported a drop in quarterly earnings and said 2023 would likely be another challenging year, even as vehicle demand remains sound.

The company’s operating profit decreased to SEK 3.4 billion in the fourth quarter from SEK 3.7 billion in the year-ago period.

“While 2023 looks to be another challenging year, we are hopeful that the COVID-related supply shortages from China are behind us and that we continue to see steady improvement in the supply of semiconductors,” Volvo Cars said in a statement, cited by Reuters.

“Despite the global turbulence, uncertainty and our recent price increases, we continue to see healthy demand for our cars,” the auto maker said.

It added that it anticipated “solid” double-digit growth in retail sales this year.

The company also reaffirmed its mid-decade objective – to sell 1.2 million vehicles per year by 2025.

The shares of Volvo Car Group were last gaining 3.21% (SEK 1.67) on the day to trade at SEK 53.67 in Stockholm, while snapping a four-day streak of losses.

The shares of Volvo Car Group have risen 13.27% so far this year, following a 38.48% loss in 2022.

The auto maker’s total market cap now stands at SEK 160.58 billion.