Volvo had its strongest financial year on record in 2021, reporting best-ever revenue and profitability even in spite of the ongoing supply chain crisis.
The company recorded revenues of SEK 282bn (£22.35bn) in 2021, up from SEK 262.8 (20.84bn) in 2020 – with operating income soaring by SEK 11.8bn (£0.94bn) year-on-year.
Outgoing chief executive Håkan Samuelsson, commenting on his final quarterly report as Volvo CEO before stepping down in March, said: “2021 was a year to be proud of for Volvo Cars. Despite persistent component supply shortages in the auto industry, we increased market share globally and delivered all-time high revenue and profitability".
The company sold 698,693 cars in 2021, a 5.6% volume increase on the 661,713 it sold in 2020. The most popular was the mid-sized XC60 SUV, of which the company sold 215,635 units, followed closely by the smaller XC40, with 201,037 sales, and the XC90 flagship in third place with 108,231 sold.
Volumes of its traditional saloon and estate cars continue to be significantly smaller, S60 and S90 accounting for slightly less than 100,000 units combined, and the V60 and V90 estates accounting for 76,600 units altogether.
The yearly uptick comes despite reduced output in the final quarter of the year, which Volvo attributes to production restrictions. Nonetheless, it says “demand and order intake remained strong”, and it was able to counteract the loss of volume by producing more high-margin cars.
Year-on-year, output was down 20% in the final quarter, but with 34% of the brand’s global sales made up of its electrified Recharge cars (28% plug-in hybrids and 6% pure-EVs), the company is progressing towards its goal of becoming fully electric by 2030.
After summer 2022, Volvo will boost annual pure-EV production capacity to 150,000 units, and expects EV sales this year to come in at more than double what they were in 2021.
The firm also acknowledged a reduced income in the final three months of the year from its joint ventures and associate enterprises - chiefly the costs incurred during the “early development phase” of recently hived off EV brand Polestar.
Volvo also said its Q4 financials were impacted by “a change in accounting treatment” for Polestar, which “related to deferred tax assets”.
The company predicts that, while “the component shortage has eased somewhat”, it will remain an inhibiting factor in the immediate future. Nonetheless, it anticipates that it will ramp up EV sales faster than the market average and expects another year of overall growth in 2022.
Join the debate
Add your comment
Am surprised that the XC60 outsells the smaller XC40, and that the large XC90 is not that far behind in the sales figure.
Further surprised that estates, Volvo's traditional strong point, sold worse than saloons. On reflection, maybe it makes sense, because the dominant market now is China not Europe where in China saloons are preferred over estates.
JLR take note!
Of course, rampant discounting to the fleet market does help.