STOCKHOLM (AFP) – Sweden’s Volvo Cars yesterday reported a drop in its first-quarter profits, even as its revenue grew, with the auto-maker saying it was looking for areas to cut costs.
Like other auto-makers, Volvo Cars has faced supply chain problems and higher costs amid soaring inflation.
The Swedish carmaker, majority-owned by China’s Geely, reported a 10-per-cent increase in sold cars to some 162,900 cars, and a 29-per-cent increase in revenue to SEK95.7 billion (USD9.3 billion).
Despite this, the company’s net profit fell to SEK3.98 billion, compared to SEK4.5 billion a year earlier.
The company said its efforts to reduce costs had started to materialise in certain areas but said it might have to look to further cut expenditure.
“Given the long-term nature of the headwinds our industry is likely to face, we are also evaluating the need for further targeted cost actions that are sustainable over time and that will contribute to our growth,” Chief Executive Officer Jim Rowan said in a statement.
Electric cars accounted for nearly one in five cars sold in the first quarter, according to Volvo, more than double the sales of the same period a year earlier.
“We remain resolute on our journey towards becoming a fully electric carmaker by the end of the decade,” Rowan added.
At the same time, electric vehicles was a sector that also saw higher production costs, with the auto-maker noting that the “costs for lithium have skyrocketed 800 per cent over the last two years”.
