EU car registrations fall in July and August amid semiconductor supply woes

LONDON (ICIS)–The rally in European passenger car demand ground to a halt at the start of the second half of 2021, with purchasing falling around 20% year on year in July and August, according to the European Automobile Manufacturers’ Association (ACEA).

After four months of strong growth, purchasing numbers turned negative for both months, falling 23% in July and 19% in August, with total sales for the region standing at 823,949 and 622,993 vehicles respectively.

France saw the sharpest drop of major EU markets in July, falling 35% year on year, while car registrations in Spain fell 29% in both July and August.

The automotive production sector has been increasingly impacted by the semiconductor chip shortage, exacerbated by the pivot in focus of chip producers last year more towards consumer electronics in the wake of the collapse in car demand when lockdowns were first introduced.

The chip shortage resulted in two million fewer vehicles than expected being manufactured in the second quarter of the year, with the industry estimating earlier in the year that the shortfall was likely to be one million in the third quarter.

Coatings manufacturer PPG estimated that the second-quarter automotive shortfall hit its sales by €100m in that quarter.

The extent of the annual decline seen in July and August could also be a result of the partial recovery in production seen later in 2020 in the wake of the initial pandemic containment response, which saw almost all car production halt and output fall to levels not seen since the 1940s.

While the ACEA noted substantial annual declines in passenger car registrations in July and August 2020, when purchases fell 6% and 19% respectively, the number of vehicles produced represented a substantial rebound from March-June that year.

Purchases stood at over a million units in July compared with around 270,000 in April and slightly over half a million in May.

The EU passenger vehicle sector remained in positive territory for the first eight months of 2021 as a whole, with purchases rising around 11% compared with the same period in 2020.

Petrol cars continued to dominate the market, but the extent of that dominance continued to slip, standing at around 42% in the second quarter, with hybrid car purchases making up around a fifth of the total and battery electric cars comprising 7.5%.

Front page picture: Mandatory Credit: An assembly line at an Audi plant in Germany; archive image
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