There's no stock for dealers to sell - the 'chip' crisis drives car sales to a new low in the EU

play article
Subscribers can listen to this article
Inside the Lamborghini factor.
Inside the Lamborghini factor.
Lamborghini Media
  • EU new car sales have been heavily impacted by electronic chip shortages.
  • New car stock shortages expected to last throughout 2022 and into 2023.
  • Pandemic expected to play ongoing role in logistics delays and materials shortages.
  • For motoring news, go to Wheels24

European Union (EU) new car sales fell to a new low last year as the auto sector was hobbled by the Covid pandemic and a shortage of computer chips. 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.

KEEP UP TO DATE with the latest motoring news by subscribing to our FREE newsletter, 'LET'S DRIVE'.

Lamborghini factory
Inside the Lamborghini factory.

Second half of 2021 was very challenging

"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 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 labour shortages," he said.

READ MORE: Volvo on the right path with electrification - battery vehicle sales up 60%

Ford Ranger
Ford's Struandale Engine Plant.

Far reaching impact of the pandemic is showing

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 labour shortages in some areas.

If 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. If the shortage of semiconductors was the major factor holding back a rebound, the EU also underperformed compared to the other major markets where the recovery from the pandemic was stronger.

Meanwhile, the Chinese car market grew by 4.4% and the US 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.

READ MORE: Driving licence card printer 'in Germany' while you drive with expired card

Ford Ranger
Ford's Struandale Engine Plant

Europe's top three manufacturers lost in sales in the region

  • 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 new vehicles tumbling by 16%, although 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-Benz 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, which are supplied by ACEA members, do not include sales by US electric vehicle manufacturer Tesla. The ACEA data also did not include a breakdown by petrol, diesel and electric vehicles, which are provided in a separate quarterly report.

KEEP UP TO DATE with the latest motoring news by subscribing to our FREE newsletter, 'LET'S DRIVE'.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Lockdown For
Brought to you by
Voting Booth
Do you think Mercedes will return to form later in the 2022 F1 season after two poor races?
Please select an option Oops! Something went wrong, please try again later.
Yes, don't discredit them.
33% - 459 votes
Who cares, F1 is exciting again!
44% - 598 votes
No, it's Ferrari's turn to dominate again.
23% - 317 votes