Automotive: the European market falls and returns to its 1995 figures with the shortage of chips

The sector’s rebound was short-lived. The European auto market returned to 1995 levels in September with 718,598 new cars sold, down 23.1% year-on-year, manufacturers said on Friday.

In September 2020, manufacturers were able to bounce back from the confinements, but September 2021 was marked by the “lack of vehicles caused by the shortage of semiconductors”, underlines in a press release the Association of European Manufacturers.

The main markets recorded double-digit declines, with Germany falling 25.7%, Italy 32.7%, France 20.5% and Spain 15.7%, between September 2020 and September 2021. Cumulatively since the start of 2021, more than 7.5 million vehicles have nevertheless been sold, ie 500,000 more vehicles than last year during the same period.

The demand for components is very strong in the automotive sector for vehicles increasingly equipped with electronic systems, from the engine to ABS, including airbags and parking assistance. However, in the context of an upturn in activity, manufacturers find themselves in competition with other industries that are hungry for chips (computers, smartphones, connected objects) which capture a large part of these parts, which are mostly manufactured in Asia.

Perspectives “further reduced” in October

Unless this shortage “cannot be resolved quickly, the outlook should be further reduced” in October, the British Builders Association (SMMT) said on Tuesday. This situation “should last a good part of 2022” especially as “new outbreaks of the Delta variant of the Covid affect important producing nations in East Asia”.

Faced with the global shortage, Emmanuel Macron announced on Tuesday “nearly 6 billion euros” of investments to “double” France’s electronic production by 2030 and “secure” its supply of chips.

In September, only the Hyundai-Kia group posted increased sales. Despite Dacia’s good scores, the Renault group has posted declining sales since the start of the year (-6.5%), like Daimler (-5.6%), Ford (-11.2 %) or Nissan (-12.4%). BMW-Mini posted an increase of 10.9%, Toyota 19.8% and Volvo 7.4%.

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