Sales of new vehicles in Europe shrank for the 10th consecutive month, as the industry remains mired in supply-chain crises that are stoking record inflation and threatening to put off buyers.
Registrations last month fell 20 percent to 830,447 vehicles, the European Automobile Manufacturers’ Association said yesterday, the steepest decline this year.
Stellantis NV was the hardest-hit among major manufacturers with a 31 percent drop.
Issues constraining production — chief among them being the global semiconductor shortage — have led forecasters at LMC Automotive to cut their sales estimate for passenger cars in Western Europe each of the past four months.
They now expect annual deliveries to shrink 6 percent this year to less than 10 million units. In January, LMC was calling for almost 9 percent growth.
Automakers have managed to make up for lost volume by charging higher prices.
“Global supply issues show no significant signs of easing, while underlying demand prospects are eroding, too,” LMC wrote in a report this month. “Households will experience a serious squeeze to real income this year. Supply issues do remain the key determinant for registrations for now.”
Across Europe’s biggest markets, Italy posted the sharpest decline, contracting by one-third, while Germany and France dropped by more than one-fifth.
The chip shortage is lasting longer than expected and forcing some buyers to wait 18 months for in-demand models.
Volkswagen AG CEO Herbert Diess last week said the company has sold all of its electric vehicles for the year in the US and Europe.
Mercedes-Benz Group AG CEO Ola Kallenius is hoping to see semiconductor supply improve in the second half of the year.
However, hopes for a recovery in the coming months also hinge on factors that include the potential for more disruptions linked to the war in Ukraine.
Global supply chains also are feeling the effects of China’s zero-tolerance approach to curbing COVID-19.
“Container ships are jamming up in Chinese harbors,” said Peter Fuss, a partner at EY’s automotive team. “It will take months to normalize that bottleneck.”
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