STOCKHOLM–Volvo Car AB said Monday that car sales fell 26.9% on year in June as Covid-19 lockdowns in China caused component shortages which primarily hit production of its fully electric and plug-in hybrid cars.

The Swedish auto maker VOLV.B, +0.08% — majority owned by China’s Zhejiang Geely Holding Group 175, -3.70% — said it sold 49,904 cars in June, down from 68,224 in the same month last year.

In Europe, sales fell 44.1% to 16,039 cars, while sales in China dropped 1.3% to 16,468 cars. The company reported a sales decline of 31.2% in the U.S., to 8,434 cars.

The company had previously said semiconductor shortages would affect production during the second quarter, but on Monday it said demand remains strong and that it is starting to see a marked improvement in its manufacturing situation.

“Volvo Cars anticipates, however, that the share of deliveries of fully electric and plug-in hybrid cars will continue to be impacted into the third quarter,” it said.

Write to Dominic Chopping at dominic.chopping@wsj.com