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Sporadic lockdowns in China caused Volvo Cars to cut its delivery targets for the year, while rising costs and the need to buy semiconductors on the open market hurt third-quarter profits.

The Swedish carmaker, backed by China’s Geely, initially expected wholesale deliveries this year to be flat compared to 2021.

But on Thursday, the company said it now expects “slightly lower wholesale volumes than 2021, assuming there are no other major supply chain disruptions.”

Chinese closures are “by far the biggest problem” for the company, Chief Executive Jim Rowan said, with some suppliers shutting down for 70 days.

The “sporadic” nature of the closures that have hit Volvo’s suppliers and plants around the world makes it “so difficult for us to predict when it will end,” he said.

The company has sought to shift supplies to Europe and the US to reduce its reliance on Chinese parts. The group is building a factory in Slovakia to increase European production and taking important parts of the electric drive system in-house.

It also expects to announce deals to increase its supply of lithium and other battery materials in the coming months, Rowan added.

In the third quarter, car sales fell 8 per cent to 138,000 vehicles, but revenue rose by a third to SKr 79.3 billion (£6.3 billion) as the previously announced price increase was pushed through.

Net profit fell 70 percent to SKr700 million. Volvo’s profit margin fell from 7.1 percent to 4.4 percent, or from 5.5 percent to 2.6 percent after including its stake in loss-making Polestar.

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