Material shortages drive car sales down 20% in Europe

The European Association of Automobile Manufacturers (ACEA) reported on Wednesday that sales of new cars in the European Union fell sharply in March, as a result of semiconductor shortages and the war in Ukraine.

In total, 844,187 vehicles were sold in March 2022, 20.5% less than in March 2021 and almost a third less than in 2019.

This is the lowest March sales volume since the start of the statistical series in 1990, with the exception of the exceptional case of 2020 when the global economy came to a halt at the start of the COVID-19 pandemic.

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The closure of Ukrainian factories has increased the shortage of electronic components and delivery problems that have affected the auto industry since the spring of 2021.

Ukraine is the main European supplier of cables that are the “nervous system” of automobiles.

In the absence of spare parts, many factories ceased operations throughout Europe.

Volkswagen was forced to temporarily halt production at several locations, including part of its historic plant in Wolfsburg and Zwickau, the center of electric car production.

Renault’s plant in Douai, which produces the electric Megane, has been suspended for 11 days.

“Logistics problems, which were exacerbated by the Russian invasion of Ukraine, had serious consequences for car production,” the association said.

Major markets saw double-digit declines, such as Germany (-17.5%), France (-19.5%), Italy (-29.7%), Spain (-30.2%), Poland (- 17.4%), Belgium (- 17.7%) and Sweden (-39.5%) .

The British market also fell by 14.3%.

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On the part of the manufacturing groups, sales of the number one Volkswagen in Europe witnessed a decline of 24.3%, and only its luxury brands (Porsche, Bentley, Lamborghini and Bugatti) were resisting the crisis.

Number two, the Stellantis Group that was born from the merger of PSA and Fiat-Chrysler, saw its market share fall to 20% with a sharp drop in sales (-32.9%) of its Peugeot, Fiat and Jeep brands.

After months of strong declines, Renault held up better in March (-14.1%) thanks to the success of its Dacia model.

Seoul Kia remained on the rise (+10.1%), while Hyundai fell 8.2%, Toyota 12.2%, as well as BMW Mini (-20.5%) and Mercedes Smart (-13.6%).

The German Manufacturers Association (VDA) cut its production forecast for 2022 to 3.3 million units produced in the country in early April, an increase of 7% compared to the 13% increase previously expected.

However, Hildegard Muller, head of the VDA, warned that “the tightening of sanctions against Russia and the interruption of production in China over its policy against covid-19 may require further adjustments in the outlook in the coming months.”