European sales plunge 25% in September amid chip supply crisis

Automotive Industry

Source: Automotive News Europe, 2021-10-15

European passenger-car registrations slumped 25% in September as the microchip shortage squeezed the supply of vehicles to dealerships.

Sales of new cars were 972,723 in the European Union, UK and EFTA markets, the lowest for the month since 1995, data from industry association ACEA showed on 15 October.

The industry group ACEA largely attributes the decline to the semiconductor shortage, which has led to production stoppages at car factories.

The September sales plunge puts the industry on course to come up short of last year's disastrous showing amid COVID-19 lockdowns that closed many dealerships.

After three consecutive declines, sales in Europe have fallen in more months than they have risen in 2021.

Market researchers now expect sales to be down in 2021 after optimism in early 2021 when ACEA predicted growth of about 10%.

"We currently forecast that this year will not eclipse the desperately weak 2020 result," LMC Automotive said in a report. "Our assumption is that sourcing issues will be with us throughout next year and continue to undermine the connection between positive underlying demand drivers and new-vehicle sales." All major European markets recorded double-digit declines in September, with sales in the UK down 35%, Italy shrinking by 33%, Germany down 26% and France down 21%. 

Sales at Volkswagen Group, Europe's largest automaker, fell 30%, with Skoda down 40%, Audi down 31%, VW brand down 28% and Seat falling 17%.

No. 2 Stellantis saw its sales drop by 30%, with Alfa Romeo down 47%, Peugeot and Fiat both down 36%, Opel down 25%, Jeep down 28% and Citroen down 24%. Sales of DS brand's upscale cars rose 9%.

Renault Group registrations fell by 24% with Renault down 30% and Dacia down 14%.

Hyundai-Kia, Europe's fourth-largest group by volume, bucked the trend with sales up 27%. Kia's registrations increased 56% and Hyundai gained 6%.

Toyota's volume was down 18% with Toyota brand down 19% and Lexus down 11%

Mercedes-Benz's registrations plunged 50% and BMW brand was down 17%.

Ford's volume fell 46%.  Automakers have managed supply shortages by prioritizing their most lucrative models and reducing their spending on marketing and incentives, buoying profit margins.

BMW earlier in October raised its projection for annual returns from automaking to 9.5% to 10.5%, up from 7% to 9%.

Suppliers have not been as fortunate. Companies that have cut their earnings guidance in recent weeks include France's Faurecia, Germany’s Hella and US-listed Aptiv.

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