According to the European Automobile Manufacturers Association (ACEA), the number of passenger car registrations in the EU plummeted by 22.8% to 795,295 units in December last year, the sixth consecutive month of decline. New car sales in the EU fell by 2.4 percent overall to 9.7 million units in 2021, the worst year since the early 1990s.
Car sales fell by double digits in December in most eu markets, with Italy down 27.5 percent, Germany down 26.9 percent, Spain down 18.7 percent and France down 15.1 percent. Looking at full-year sales in 2021, only Germany, the four largest markets in the EUROPEAN Union, fell by 10.1%, compared with Italy up 5.5 percent, Spain up 1.0 percent and France up 0.5 percent.
Automakers have been predicting that the global chip shortage will ease for months, but now their expectations have deteriorated. Procuring enough chips this year will remain a daunting task, and the COVID-19 pandemic continues to hit consumer confidence. Renault SA said last week that chip shortages would peak in the first six months and then slowly improve as capacity increased.
Peter Fuss, partner in EY's automotive team, said: "Car sales in 2022 will be as challenging as 2021." "We are still facing a global pandemic and omicron is still raging in Europe, which will continue to limit consumer behavior to a large extent."
With the supply of new and used cars still constrained, automakers will benefit from strong car prices. Last year, most companies successfully shifted production to high-end cars with higher profit margins to offset the decline in sales.
"There is a clear mismatch between market activity and potential demand," analysts at LMC Automotive said this month in a report on car sales in Western Europe. Under the baseline assumption, supply issues dominated by chip shortages will continue to disrupt the auto market, although the impact will gradually ease in 2022.