European car sales continue to lag behind pre-pandemic levels
Below Still Sales Covid Levels Pre Are Car
Carmakers sold almost two million fewer cars in Europe during the first half of this year, compared with two years ago, as the industry’s recovery in the region falls short of the rebound seen in the US and China.
Registrations rose 13% in June compared with a year ago, bringing the total in the first six months to 6.49m cars, according to the European Automobile Manufacturers’ Association.
While that’s a 27% increase from the first half of last year, it’s well below levels the industry was accustomed to prior to the pandemic.
Europe’s slower pace of vaccinations and longer-lasting measures to contain the spread of Covid-19 kept a lid on sales early in the year, while the global shortage of semiconductors also constrained car makers’ ability to maintain inventory.
The dearth of chips will continue to pinch production for years to come, according to the chief executives of Volkswagen, BMW, and Renault.
“With the further easing of lockdown measures and subsequent support from an improving economic backdrop, selling rates should pick up over the second half of this year,” analysts at LMC Automotive said in a report.
The slower sales recovery in Europe is having little effect on the bottom lines of VW and Stellantis, the region’s two largest car manufacturers. The former is benefiting from strong deliveries in China, while the latter is cashing in on buyers snapping up lucrative Jeep sport utility vehicles and Ram pickups in the US.
Stellantis posted the biggest sales gain among major carmakers in Europe during the first half with a 32% increase, ahead of VW group’s 29% advance. Renault’s registrations slumped 19% last month, limiting the French carmaker to a 7% gain through June.
VW last week reported that earnings surged to €11bn in the first half, while Stellantis said its profit margin for the period should exceed its 5.5% to 7.5% forecast for the year.
Ford is getting a boost from a “breathtaking” rise in pricing, CEO Jim Farley said last month, after issuing a much better financial outlook. Mercedes-Benz maker Daimler similarly said, on Thursday, that its sales skewed to more lucrative models last quarter.
In the luxury segment, BMW got the better of rival Daimler both last month and in the first half. The Bavarian brand was up 21% in June and 31% year-to-date, while Mercedes registrations slumped 13% last month and increased 18% so far this year.
In Ireland, the Society of the Irish Motor Industry (SIMI) recently said it was optimistic after CSO data showed a strong rise in new car registrations in June. However, SIMI warned that while some level of lost sales may be recovered in the second half of the year, the Covid impact felt by the Irish motor sector will continue.
• Bloomberg and