AB Volvo warns of production fall due to chip shortage
Analysts estimate that Volvo will make 16,000 fewer trucks in the second quarter
Swedish truck manufacture AB Volvo has warned of a production hit in the second quarter due to the shortage of semiconductors, sending its shares down seven per cent.
Due to the worldwide shortage the company, which has 18 production facilities globally, was forced to cut production at its factories in Belgium and Brazil.
Volvo, which competes with Germany’s Daimler and Traton, said visibility into the supply chain of semiconductors was very low and that the disturbances would also impact other business units of the group.
Analysts at Deutsche Bank estimated that Volvo would make 16,000 fewer trucks in the second quarter and consensus earnings could come down by four to seven per cent this year.
Semiconductor shortages have hit global automakers, forcing them to cut or stop production as the available supply of chips were taken by makers of electronics such as smartphones, as they have a higher consumer base.
US automakers including General Motors and Ford, Germany’s Volkswagen and Japan’s Honda Motor have all been affected by the shortage.
Volvo Cars had also said it would temporarily stop or make adjustments to production in China and the US during March.
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