European car sales slide amid chip shortage

Car sales in the European Union fell sharply in December, industry data showed on Tuesday, as the global chip shortage weighed heavily.

According to the European Automobile Manufacturers Association (ACEA), passenger car registrations in December tumbled 22.8% to 795,295 units, the sixth consecutive monthly fall. In November, sales fell 20.5%.

In the Eurozone, car registrations were down 22.6% following November’s 20.8% decline.

Within member states, Germany reported a 26.9% slide, while Italy, Spain and France saw sales fall 27.5%, 18.7% and 15.1% respectively.

Overall, sales of new cars fell by 2.4% across the EU in 2021 to 9.7m units. That was despite a record low base comparison with 2020, when sales were heavily disrupted by lockdowns.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "Last year was a year of recovery in the Eurozone and EU economies, but not for domestic auto sales.

"The poor performance is primarily due to shortages and disruptions in semiconductor markets, which hit production and firms’ ability to deliver, especially in the second half of the year.

"Looking ahead, we think these headwinds will clear in 22022, but slowly. Semiconductors are complex products used in a wide range of important capital and consumer goods, and supply can’t just be raised from one day to the other. In addition, the policy of zero-Covid in large parts of Asia will, especially in China, continue to disrupt supplies of key material from this region to Europe, even if factories increase capacity."

By manufacturer, 2021 new passenger car registrations were down 4.8% at Volkswagen, and fell 2.1% at Stellantis, 10.2% at Renault, 1.5% at BMW and 19.0% at Ford, the ACEA said.