Geely‘s Volvo Cars reported “steady earnings” for the second quarter of 2022 “in the face of ongoing uncertainties in global trade, increasing raw material prices, and supply chain constraints arising out of recent pandemic lockdowns in China”.

Retail sales fell 27% year on year to 143,006 cars while revenue was off 2% to SEK 713 billion and was “less impacted than retail sales due to strong pricing and product mix”.

Lower volume affected core EBIT performance, although this was largely stable through strong prices and product mix. EBIT for the core operation reached SEK 4.6 billion, or a margin of 6.5%, while the reported EBIT including joint ventures and associates reached SEK 10.8 billion, or a margin of 15.1%. The reported EBIT was positively impacted by the accounting effect of the listing of Polestar at the Nasdaq stock exchange in New York last month, in which Volvo Cars is the largest shareholder.

“We are satisfied that we have delivered steady earnings,” said Jim Rowan, president and chief executive. “The demand for our products continues to be robust.”

The automaker was also seeing a marked improvement in the stabilisation of its supply chain with production making a strong comeback in June. Provided this continues, the company expects production to progressively increase in coming months and Volvo Cars expects wholesale volume for 2022 to be better than in 2021. However, due to the time lag between production and retail deliveries, those improvements are not expected to result into an increase in retail sales during the calendar year. So, for the full year 2022, the company anticipates retail sales to be flat or slightly lower compared with 2021.

Recharge models remained popular with customers in Q2 though production was hampered by ongoing supply constraints caused by lockdowns in China. Electrified sales made up 31% of total colume, up 24% on last year. This could have been higher without supply constraints.

The number of active subscriptions at the end of the second quarter increased 122% driven by demand in combination with a broadened offer as online fleet sales for small and medium enterprises were introduced both in the UK and in Sweden. Q2 online sales made up 9.5% of total sales in established markets, compared with 4.6%.