The automobile market is destabilized by the war in Ukraine and the shortage of semiconductors. Sales of new vehicles plunged in the European Union in March, the European Manufacturers Association (ACEA) said on Wednesday (April 20th).
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In total, 844,187 vehicles were sold in March 2022, a decrease of 20.5% compared to March 2021. This is almost a third less than in 2019. This is the most low sales volume for a month of March since the start of the statistical series in 1990, excluding the exceptional case of 2020, when the economy was paralyzed at the start of the Covid-19 pandemic.
The shutdown of Ukrainian factories has added to electronic component shortages and delivery issues that have plagued the auto industry since the spring of 2021. Ukraine is notably the main European supplier of wiring harnesses, parts described as the “nervous system” of cars.
Several factories put on hold in Europe
“Logistical problems, compounded by Russia’s invasion of Ukraine, have had a negative impact on automobile production», notes the ACEA.
Due to a lack of parts, several factories have therefore been put on hold across Europe. Volkswagen had to temporarily halt production at several German sites. This was the case in part of its historic factory in Wolfsburg and in Zwickau, its production center for electric cars. The Renault factory in Douai, which produces the electric Mégane, was also shut down for eleven days.
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The main markets experienced double-digit declines, such as Germany (17.5% drop), France (19.5%), Italy (29.7%), and Sweden (39.5%). Close to the European Union, the British market also fell by 14.3%.
Volkswagen, number one in Europe, down 24.3%
As for automotive groups, the European number one Volkswagen saw its sales fall by 24.3%. Only its luxury brands, such as Porsche, Bentley, Lamborghini and Bugatti, are resisting the crisis.
Number two, the Stellantis group born from the merger of PSA and Fiat Chrysler, saw its market share fall to 20% with a sharp drop in sales (32.9%), and poor scores for Peugeot, Fiat and Jeep . After months of sharp decline, Renault held up better in March (–14.1%), driven by the success of Dacia.
Only Kia continues its momentum (+ 10.1%) while Hyundai is down 8.2%. Toyota fell by 12.2%, BMW-Mini by 20.5%, Mercedes-Smart by 13.6%.
The Federation of German Manufacturers (VDA) sharply lowered its production forecast for 2022 in early April. It expects 3.3 million units produced in Europe’s largest economy, an increase of 7%, against + 13% previously expected .
Now, a “expanding of sanctions against Russia and production interruptions in China, due to the “zero Covid” strategy adopted by Beijing, could necessitate further adjustments to the prognosis in the coming months”, said Hildegard Müller, president of the VDA.