European car sales fall for seventh consecutive month on chip shortage

Shoppers looking to buy new cars have been forced to wait for weeks or months, and the prices of used cars have surged.

European car sales declined for a seventh consecutive month in January as an ongoing semiconductor shortage continued to hold back production.

New-car registrations in Europe fell 2.4% to 822,423 in January compared to last year, the European Automobile Manufacturers’ Association said. The drop prolongs the industry’s worst stretch since the association started tracking the market in the early 1990s.

“As global production continues to be limited by a lack of parts, particularly microchips, supply shortages remain the number one drag to better market results, with this expected to remain a key feature of the automotive landscape for 2022,” forecaster LMC Automotive said in a report.

A shortage of semiconductors has hindered the production of consumer goods ranging from electronics to cars across the globe. Shoppers looking to buy new cars have been forced to wait for weeks or months, and the prices of used cars have surged.

Car sales were uneven across Europe’s biggest markets last month. While France and Italy posted some of the most significant declines, sales in Germany and the UK grew modestly. But analysts and auto executives agree that the chip shortage will continue to dog the industry this year.

Volkswagen’s CEO Herbert Diess and other executives have signalled they see the chip supply improving in the second half of 2022, though few have offered specifics as to how it would be resolved.

Figures, earlier this month, from the Society of the Irish Motor Industry (SIMI) showed that just over 25,000 new cars were registered in Ireland during January, with significant growth for electric and hybrid vehicles noted.

There was a record high of 2,714 new electric cars registered in January, compared to 977 in the same month last year. Used car imports fell by nearly 41%, meanwhile.

- Bloomberg and Irish Examiner