Sweden’s Volvo Trucks posted a better-than-expected profit in the third quarter on strong demand, despite a chip shortage hampering truck production, foreign media reported.  Volvo Trucks’ adjusted operating profit rose 30.1 per cent to SKr9.4bn ($1.09 billion) in the third quarter from Skr7.22bn a year earlier, beating analysts’ expectations of Skr8.87bn.

The impact of the “core shortage” has abated, with 290,000 truck registrations in Europe and the US this year

A global semiconductor shortage has hit many manufacturing sectors, particularly the auto industry, preventing Volvo from benefiting more from strong consumer demand.  Despite a strong recovery in demand, Volvo’s revenues and adjusted profits remain below pre-pandemic levels.

A shortage of parts and tight shipments led to production disruptions and increased costs,  such as engine pumps, engine parts and cooling system parts,Volvo said in a statement.  The company also said it expected further disruptions and shutdowns of its truck production and other operations.

Jpmorgan said that despite the impact of chips and freight, Volvo had delivered “a fairly good set of results”.  ”While supply chain issues remain unpredictable and semiconductor shortages are still impacting the automotive industry in the second half of 2021, we agree that the market expects a slight uptick.”

Volvo Trucks competes with Germany’s Daimler and Traton.  The company said orders for its trucks, which include brands such as Mark and Renault, fell 4% in the third quarter from a year earlier.

Volvo forecasts that the European heavy truck market will grow to 280,000 vehicles registered in 2021 and the US market will reach 270,000 trucks this year.  The European and US heavy truck markets are both set to grow to 300,000 units registered in 2022.  The company had forecast 290,000 truck registrations in Europe and the US this year.

In October 2021, Daimler Trucks said its truck sales would continue to be below normal in 2022 as a chip shortage hampered vehicle production.