Lack of computer chips means that car sales in Europe are at a record low

Car sales in the EU fell to a new low last year when the car sector was hampered by the Covid pandemic and a lack of data chips, industry figures showed on Tuesday.

The registration of new passenger cars in the EU fell by 2.4 percent in 2021, to 9.7 million vehicles, the worst result since statistics began in 1990, according to data from the European Automobile Manufacturers Association (ACEA).

This follows the historic fall of almost 24 percent affected in 2020 due to pandemic restrictions, bringing the registration of new cars in the EU to 3.3 million during sales before the 2019 crisis.

The lack of semiconductors, the computer chips used in a variety of automotive systems in both traditional and electric vehicles, was the main reason the industry held back.

“This decline was the result of the semiconductor shortage that negatively affected car production throughout the year, but especially during the second half of 2021,” says ACEA.

The car manufacturers initially toned down the effects of the chip shortage, but this eventually led to slow production and even inactive factories.

Car sales in the EU recovered strongly during the second quarter, but during most of the second half of the year it decreased by about 20 percent.

The short-term prospects for deliveries are not good.

“The beginning of 2022 will still be difficult when it comes to deliveries of chips,” Alexandre Marian of consulting firm AlixPartners told AFP.

“The situation should improve by the middle of the year, but that does not mean that other problems will not arise, regarding raw materials, supply chains and labor shortages,” he said.

The chip shortage is a consequence of the pandemic as manufacturers were disrupted by shutdowns and sick employees, as well as problems with the supply chain and increased global demand for electronics.

The pandemic has also pushed up the prices of many commodities and caused a shortage of labor in some areas.

Germany stuck in reverse If markets in France, Italy and Spain showed modest gains, a decline of 10.1 percent in Germany dragged down the overall EU figure.

Germany is by far Europe’s largest car market and accounted for a quarter of total sales of over 2.6 million last year.

If the lack of semiconductors was the main factor holding back a recovery, the EU also performed worse compared to the other major markets where the recovery from the pandemic was stronger.

The Chinese car market grew by 4.4 percent and the US market by 3.7 percent.

The decline in European sales may also reflect “the sharp rise in the average price of cars as well as an expectant attitude among consumers towards electric vehicles that will force them to postpone purchases and keep their current car longer”, says an analyst at Inovev, a vehicle data analysis companies.

Renault reaches sales hole Europe’s three top car manufacturers all saw a decline in sales in the block.

Volkswagen managed to maintain the top spot, but a decrease of 4.8 percent in sales to 1.4 million vehicles caused its market share to fall to 25.1 percent.

Stellantis, formed by the merger of the Italian Fiat Group and the French Peugeot-Citroen, suffered a slight decrease of 2.1 percent to 2.1 million units, which increased its market share to 21.9 percent.

The Renault group suffered a 10 percent decline, with sales of its self-titled brand falling by 16 percent, while sales of both the low-cost Dacia brand and sporty Alpine brands increased.

The French automotive group saw its market share fall to 10.6 percent.

Germany’s BMW managed to increase the number of registrations by 1.5 percent, but Daimler – the owner of the brands Mercedes and Smart – suffered a decrease of 12.4 percent.

Korea’s Hyundai Group – which includes both the Hyundai and Kia brands – consolidated its position as the number four carmaker in the EU with an increase of 18.4 percent to over 828,000 vehicles.

Its market share rose to 8.5 percent.

The information, provided by ACEA members, does not include sales from the American electric vehicle manufacturer Tesla.

The ACEA data also did not include a breakdown of petrol, diesel and electric vehicles, which is given in a separate quarterly report.

(AFP)

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