Europe car sales lowest since 1996 following 12-month decline

Volkswagen Group was the hardest-hit major carmaker with nearly a quarter less sales than last June.

Fri, 15 Jul, 2022 - 12:04

Europe registered the lowest number of new passenger cars in the month of June this year since 1996 at just over 1.06m vehicles, with some carmakers seeing sales drop by nearly 50%, data from Europe's automobile association showed on Friday.

Volkswagen Group was the hardest-hit major carmaker with nearly a quarter less sales than last June. Across the first half year, however, Stellantis has seen the biggest drop so far at 21.1%.

Among smaller brands, Volvo's new registrations fell 47.9% in June and 28.5% across the first half of the year, while Jaguar Land Group saw a lesser fall in June at 13.2% but the steepest hit this year so far at 34.7%.

Inflation, supply chain bottlenecks, rising coronavirus cases in some countries and an ongoing chip shortage are just a few of the problems plaguing the auto industry in the region, which has now registered 12 consecutive months of declines.

Major carmakers from BMW to Stellantis have in recent weeks reported falling sales globally ahead of their second quarter results later this month.

All four of the major European Union markets - Spain, Italy, Germany and France - reported a decline in car registrations.

Volkswagen sales drop

Volkswagen's sales in western Europe fell 25.7% in the second quarter, Friday's data showed, while China and the Americas saw a more moderate drop of around 16-18%.

While sales in Russia accounted for only around 2% of Volkswagen's total sales in 2021, the war has caused disruptions across Europe's car industry from supply chain bottlenecks to inflation impacting deliveries throughout the region.

Battery-electric vehicle (BEV) deliveries increased by just over a quarter to 217,100, making up 5.6% of total sales - bolstered largely by significant growth in China.

While Europe, traditionally Volkswagen's strongest battery-electric market, saw a 16.5% drop in BEV sales in the second quarter, sales more than doubled in China.

In the first half of the year, Volkswagen's China BEV sales saw a more than three-fold increase from last year to 63,500 units, the company reported.

Still, the carmaker lags far behind local competitors and Tesla in China, selling around five times less than Tesla and 10 times less than domestic EV maker BYD in May.

Speaking to journalists earlier on Wednesday, Volkswagen's China chief said it "looks promising" for sales of its ID electric vehicles to more than double this year in the country.