By Helena Soderpalm
STOCKHOLM (Reuters) -Volvo Cars flagged a potential dip in retail sales this year after posting higher second-quarter profits.
Supply problems, above all a global shortage of semiconductors, have squeezed output and retail sales in recent quarters, but Volvo said it was seeing a "marked improvement" in the stabilisation of its supply chain.
The Sweden-based carmaker said on Wednesday it expected full year retail deliveries to be lower or on par with 2021, while wholesale volumes will increase.
"However, due to the time lag between production and retail deliveries, those improvements are not expected to result in an increase in retail sales during the calendar year," the company said.
Volvo Chief Executive Jim Rowan said the company would "keep an eye on" consumer sentiment, not least due to higher inflation.
"But right now demand is very strong," he said.
Volvo's quarterly operating profit rose to 10.8 billion Swedish crowns ($1.06 billion) from 4.8 billion a year ago as accounting effects from the listing of high-performance automaker Polestar gave a boost.
Operating earnings for the core business at Volvo Cars, majority owned by China's Geely Holding, reached 4.6 billion in the quarter.
"Volvo reported a solid set of Q2 results in the light of multiple hurdles including semiconductor constraints and impact of Chinese lockdowns on demand," investment bank JPMorgan (NYSE:JPM) said in a note.
($1 = 10.2089 Swedish crowns)