Automakers registered the fewest new vehicle sales in the EU since 1996 as persistent supply chain snarls and record inflation afflict the industry.
New vehicle sales in the EU and four other states tracked by the European Automobile Manufacturers’ Association fell 17 percent to 1.07 million last month, it said in a statement.
Volkswagen AG was the hardest-hit major carmaker, with registrations dropping 24 percent from a year ago.
Photo: Bloomberg
While manufacturers including Volkswagen, BMW AG and Mercedes Benz AG last month said the shortage of semiconductors had started to ease, it takes time for any boost in production to flow through to showrooms and enable dealers to work down order books. Manufacturers are also dealing with raw material and energy costs, which are contributing to vehicle price increases.
“The industry will not overcome supply constraints anytime soon,” LMC Automotive said in an update this month. “Another concern relates to underlying demand, which has weakened in recent months as the economic outlook has deteriorated.”
Sales in major markets — including Germany and the UK — might return to growth this month due to an easy year-ago comparison, according to Bloomberg Intelligence.
While that suggests the industry stands a chance of snapping a 12-month streak of consecutive declines, it would be difficult to make up for production losses during the first half.
LMC Automotive now estimates Western European passenger car deliveries would drop 6.3 percent this year to 9.92 million. In January, the market researcher predicted sales would grow almost 9 percent.
Forecasting demand remains difficult due to risk that energy shortages will worsen. The main conduit for Russian gas to Europe went down for maintenance this week, and Berlin and its allies are bracing for Russian President Vladimir Putin to cut off flows for good in retaliation for sanctions and support for Ukraine.
“An increasing fear developing concerns potential plant shutdowns in Germany related to energy shortages,” Tom Narayan, RBC Capital Markets’s European auto analyst, wrote in a report on Tuesday last week. “The concern has more to do with the supply chain (chemical plants in Germany shutting down production of plastics used for car components, etc), and as such, may not impact German OEMs any more than others.”
Automakers have compensated for lost volume by charging higher prices and focusing on their most expensive and profitable models. However, with inflation soaring and consumers cutting back spending, that strategy could run up against limits.
“We are a little bit cautious about the outlook next year,” Volkswagen CEO Herbert Diess said in an interview last week with Bloomberg Television. “The world will remain unstable. That’s our assumption, so we have to be a bit cautious.”
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
Until US President Donald Trump’s return a year ago, when the EU talked about cutting economic dependency on foreign powers — it was understood to mean China, but now Brussels has US tech in its sights. As Trump ramps up his threats — from strong-arming Europe on trade to pushing to seize Greenland — concern has grown that the unpredictable leader could, should he so wish, plunge the bloc into digital darkness. Since Trump’s Greenland climbdown, top officials have stepped up warnings that the EU is dangerously exposed to geopolitical shocks and must work toward strategic independence — in defense, energy and
Motorists ride past a mural along a street in Varanasi, India, yesterday.
RSS