European car sales hit record low, but carmakers eye recovery from chip shortage crisis
Big car firms feel the parts crisis is behind them.
Car sales in Europe skidded to their worst level on record for October, as manufacturers hope the protracted shortage of chips slicing production is finally easing.
New-car registrations fell 29% during the month to 798,693 vehicles, the European Automobile Manufacturers’ Association said, leaving sales for the year only 2.7% higher than at this point in 2020.
While deliveries fell for the fourth month in a row, companies are seeing signs the worst of the chip crunch is finally behind them. “We’re getting by. We’re trying to deal with it,” Volkswagen CEO Herbert Diess said this week.
“I hope we’re through the worst.”
Renewed outbreaks of Covid-19 restricting output at chip packaging and testing facilities in south-east Asia, during the third quarter, unexpectedly exacerbated tight supply of the components, and port closures further snarled shipments.
While carmakers have predicted some improvement, the situation is set to remain difficult well into next year. Volkswagen, Europe’s biggest carmaker, was hit hardest among major manufacturers with a 42% slide in deliveries during October compared to a year ago.
Sales at Stellantis, the second-biggest producer of brands like Fiat and Peugeot, slumped 32%.
“Registrations could improve in November as supply constraints diminish,” Bloomberg Intelligence analyst Michael Dean said.
“Many manufacturers have partly assembled vehicles so they can be completed swiftly once semiconductor availability improves.”
After the long stretch of declines, sales in Europe have fallen for more months than they’ve risen this year, leading market researchers such as LMC Automotive to predict annual sales will likely miss 2020’s pandemic-hit levels.
Carmakers have weathered the supply crisis by prioritising their highest-earning models and raising prices. Among major manufacturers, deliveries at Ford and Renault have taken the biggest hit with sales falling 15% and 11% respectively this year so far.
The latest pan-European figures follow on from recent Irish figures showing a strong October for car sales in Ireland.
According to recent figures from the Society of the Irish Motor Industry (SIMI), last month saw a 15.2% year-on-year rise – to 2,646 – in new cars registered.
October sales were also up by over 21% on the same month in 2019. However, in the year to date, 103,253 new cars have been registered. That number is up nearly 19% on the first 10 months of 2020, but is down by over 11% on the same period in 2019.
“New car registrations for October were ahead of last year for both the month and for the year to date, although new car sales continue to remain behind pre-Covid levels,” said SIMI director general Brian Cooke.
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