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High-end automakers Volvo Cars and Mercedes said Friday that the global supply chain bottlenecks caused them to sell fewer cars, but that their profitability rose as they were able sell vehicles at higher prices.
Chinese-owned Volvo Cars said the global shortage of semiconductors -- an essential tech component in modern cars -- caused sales and profits to fall in the last quarter of the year.
Retail sales fell by 20 percent to 168,000 units in the fourth quarter of the year.
But revenue fell at a smaller rate, six percent, as "strong demand had a positive effect on prices and the sale of more expensive cars" while interest in electrified cars continued to grow globally.
Revenue fell to 80 billion kronor ($8.6 billion, 7.5 billion euros) from the same quarter in 2020 while net profit sank by 60 percent to 2.3 billion kronor.
Owned by Geely, the Sweden-based carmaker said the semiconductor shortage worsened in the second half of 2021.
"The result was a year of two halves," Volvo Cars said in an earnings statement.
"During the first half, the market was up by double digits but abruptly stalled in the second half due to Covid-related shutdowns in South East Asia and other semiconductor-related production disturbances," it said.
The picture was brighter for the full year, with revenues jumping by seven percent to a record 282 billion kronor.
Net profit soared to 14.2 billion kronor, nearly double the 2020 figure.
Profitability also rose, with its operating margin rising by four percentage points to 7.2 percent.
"2021 was a year to be proud of for Volvo Cars," said chief executive Hakan Samuelsson.
"Looking ahead, uncertainty is still high. While component shortage has eased somewhat, we expect the supply chain to remain a restraining factor," he warned.
Volvo Cars, which plans to sell only fully electric models by 2030, said the share of sales of rechargeable vehicles -- including plug-in hybrids -- grew to 34 percent in the fourth quarter.
- 'Solid net pricing' -
In Germany, Mercedes-Benz beat expectations with a record profitability margin of 15 percent in the final quarter of 2021 "driven by solid net pricing" -- or the ability sell its cars for higher prices.
To some extent automakers were able to use chips in their most profitable cars.
If Mercedes-Benz's overall sales slid five percent last year, those of its S-Class sedans rose by 40 percent and its luxurious Maybach brand by 50 percent to a new record.
"Our focus on profitable growth and cost discipline combined with a desirable product lineup translated into strong financial performance," chief executive Ola Kallenius said in a statement.
Operating profits at the company's car and vans division is expected to come in around 14 billion euros, compared to 6.8 billion in 2020 and 6.2 billion in 2019.
The company releases its complete results on February 24.
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