Volvo, Mercedes boost profits

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 per cent 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 per cent to 2.3 billion kronor. Owned by Geely, the Sweden-based carmaker said the semiconductor shortage worsened in the second half of 2021.