European car sales dived to a new historic low in 2021 as the automotive industry was hobbled by the coronavirus pandemic and a shortage of computer chips, industry figures showed Tuesday.
Registrations of new passenger cars in the EU slid by 2.4% in 2021, to 9.7 million vehicles, the worst performance since statistics began in 1990, according to data from the European Automobile Manufacturers Association (ACEA).
That follows the historic fall of nearly 24% suffered in 2020 due to pandemic restrictions, and brought new car registrations in the EU to 3.3 million below the pre-crisis sales of 2019.
The lack of semiconductors, the computer chips used in a multitude of car systems in both traditional and electric vehicles, was the main reason holding the industry back.
"This fall was the result of the semiconductor shortage that negatively impacted car production throughout the year, but especially during the second half of 2021," said the ACEA.
Car manufacturers initially downplayed the impact of the chip shortage, but it eventually led them to slow production and even idle factories.
EU car sales did rebound strongly in the second quarter, but for most of the second half they were down by around 20%.
The short-term perspectives for supplies are not good.
"The start of 2022 will still be difficult in terms of supplies of chips," Alexandre Marian at the AlixPartners consultancy told the Agence France-Presse (AFP).
"The situation should improve in the middle of the year, but that doesn't mean other problems won't crop up, concerning raw materials, supply chains and labor shortages," he said.
The chip shortage is a consequence of the pandemic as manufacturers were disrupted by lockdowns and sick employees, as well as supply chain problems and increased global demand for electronics.
The pandemic has also sent prices for many raw materials soaring and caused labor shortages in some areas.
Germany stuck in reverse
As the markets in France, Italy and Spain posted modest gains, a 10.1% drop in Germany dragged down the overall EU figure.
Germany is by far Europe's largest car market, accounting for a quarter of total sales at over 2.6 million last year.
The shortage of semiconductors was the major factor holding back a rebound, but the EU also underperformed compared to the other major markets where the recovery from the pandemic was stronger.
The Chinese car market grew by 4.4% and the U.S. market by 3.7%.
The decline in European sales may also reflect "the sharp increase in the average price of cars as well as an expectant attitude by consumers concerning electric vehicles, which is pushing them to put off purchases and hold on to their current vehicle longer," said analysts at Inovev, an automotive data analytics firm.
Renault hits sales pothole
Europe's top three auto manufacturers all saw a drop in sales in the bloc.
Volkswagen managed to retain the top spot, but a 4.8% drop in sales to 1.4 million vehicles caused its market share to dip to 25.1%.
Stellantis, which was formed from the merger of Italy's Fiat group and France's Peugeot-Citroen, suffered a smaller 2.1% drop to 2.1 million units, nudging its market share higher to 21.9%.
Renault group suffered a 10% drop, with sales of its eponymous brand tumbling by 16%, while sales of both its low-cost Dacia brand and sporty Alpine brands rose.
The French automotive group saw its market share narrow to 10.6%.
Germany's BMW managed a 1.5% increase in registrations, but Daimler – the owner of the Mercedes and Smart brands – suffered a 12.4% drop.
Korea's Hyundai Group – which includes both the Hyundai and Kia brands – solidified its position as the number-four carmaker in the EU with an 18.4% gain to over 828,000 vehicles.
Its market share rose to 8.5%.
The data supplied by ACEA members does not include sales by U.S. electric vehicle manufacturer Tesla.
The ACEA data also did not include a breakdown by petrol, diesel and electric vehicles, which is provided in a separate quarterly report.