Mercedes-Benz Group AG sold 16 per cent fewer cars during the second quarter as COVID-related lockdowns and a prolonged shortage of semiconductors continued to weigh on production.

Deliveries in China, the world’s largest car market, declined 25 per cent, while sales in Europe fell 10 per cent, the Stuttgart-based automaker said in a statement Monday.

“We are making every effort to fulfill customer expectations, despite the current supply restrictions,” said Britta Seeger, the management board member responsible for marketing and sales.

The auto industry is still feeling the pain of supply-chain disruptions and shortages of components such as semiconductors, particularly amid a broad transition to electric vehicles that are dependent on increasingly sophisticated software. BMW AG said last week that its sales declined almost 20 per cent in the second quarter. 

Ongoing supply-chain problems could jeopardize Mercedes’s plan to cut back on entry-level vehicles in order to focus on higher-end cars that deliver bigger profits. Mercedes said a dearth of chips contributed to a 16 per cent decline in sales for the top-end luxury category.

EV sales were a bright spot in Mercedes’s report, with its EQ sales nearly doubling to 23,500 units compared to the same period last year. The first half of the year saw the brand’s EV sales rising to 45,400 units -- an increase of 134 per cent.

“The electric ramp up is gaining traction,” Seeger said. “It shows that we offer compelling electric vehicles our customers desire.”