Geely's Volvo Cars warns on sales as supply woes dent output

STOCKHOLM (Reuters) - Sweden-based automaker Volvo Car Group warned on Friday that sales volumes in the second half of 2021 could fall year-on-year after it was forced to cut production due to material shortages.

The carmaker, owned by China's Geely Holding, said sales fell 10.6% from a year ago in August, despite strong underlying demand, and cautioned the potential decline in volumes in the second half could impact revenue and profit.

"But Volvo Cars' outlook for the full year 2021 still remains," it said in a statement, referring to a forecast of sales volume and revenue growth with improved profitability to pre-pandemic levels.

Volvo Cars said supplier shut-downs since mid-July - due to local efforts to limit the spread of the highly contagious Delta variant in South-East Asia - had worsened an already strained supply situation, forcing it to halt production.

A global chip shortage over the past year had already caused a major delay in manufacturing activity and forced several automakers to scale back output.

Global sales at the firm, which is considering listing on the Nasdaq Stockholm stock exchange this year, fell to 45,786 cars in August, with sales in Europe dropping 25% while they rose 3% in the United States.

(Reporting by Helena Soderpalm; editing by Niklas Pollard)