LMC Automotive European Passenger Car Sales Update (July 2021)

2021/08/10

Summary

  • The West European selling rate dropped to 10.5 mn units/year in July, from 11.9 mn units/year in June. The supply‐side issue of the availability of semiconductor chips is clearly having a negative impact on selling rate recovery in the region, holding back the post‐lockdown rebound in demand.

  • In Germany, the selling rate dropped to 2.7 mn units/year in July, from 2.9 mn units/year previously. In Spain, the selling rate dropped down to 867k units/year despite the temporary drop in registration tax that came into effect during last month. For France, the selling rate fell to 1.5 mn units/year. In the UK, the selling rate fell to 1.8 mn units/year as the chip shortage constrained supply. Finally, in Italy, the selling rate fell to 1.4 mn units/year, marking the lowest level since the pandemic‐struck May 2020 result.

  • The impact of the global semiconductor shortage has led us to significantly reduce our PV sales forecast from last month as the crisis is clearly disrupting deliveries in many markets and will not dissipate in the immediate term. We see selling rates gradually improving in H2 and well into 2022, as some built up savings over the pandemic are expected to be released. For now, however, the impact of the chip shortage is thwarting the auto sector’s ability to reap the benefits of the improving wider economic backdrop. Moreover, risks lie on the downside as the more transmissible Delta variant of coronavirus spreads apace through Europe, meaning, despite vaccine progress, further restrictions cannot yet be fully ruled out.