Car market continues to regress (Update)
In November, 24 134 new cars were registered in Belgium, again 17,1% less than in the pandemic year 2020, and -30,2% compared to November 2019. The same tendency is to be seen practically all over Europe.
The semiconductor shortage plays a significant role in this and nowhere it’s so visible as in Germany and Russia. The UK is somewhat an exception in the figures due to the success of electric cars.
In the whole European Union, passenger car registrations fell for the fifth consecutive month this year (-20.5%), totaling 713 346 units sold. In volume terms, this result marked the lowest November total on record since 1993.
Double-digit losses were recorded in many EU markets, including three of the four major ones: Germany (-31.7%), Italy (-24.6%), and Spain (-12.3%). Bulgaria, Ireland, and Slovenia were the only EU markets posting growth.
Eleven months into the year, the impact of the microchip shortage on vehicle output dragged the EU’s year-to-date sales performance into negative territory (-0,04%), and this despite 2020’s record-low base for comparison.
Nevertheless, three of the four largest EU markets still posted positive results from January to November 2021: Italy (+8.6%), Spain (+3.8%), and France (+2.5%). In Germany, on the other hand, registrations of new cars further weakened (-8.1%) compared to one year ago.
2019 was an excellent year for the car business, especially in Belgium, but this has turned a lot lately. Of course, there was the pandemic year with the lockdowns in 2020, but now it seems that sales aren’t recovering, on the contrary.
Compared to last year, 362 746 cars have been sold in Belgium, and that’s 9,6% less than last year and a whopping 29,8% less than in 2019 (admittedly, a record year).
The damage is less pronounced in the commercial vehicles sector, and the market seems to be picking up lately because the economy is growing again. As far as motorbikes are concerned, the market is still progressing, with a clear plus for November (+6,9%) and still growing overall (+1,5% compared to 2020, and +2,4% compared to 2019).
When you look at the brands, BMW confirms its ascendancy and is the only manufacturer that obtains more than 10% of the market, with an 11% growth figure compared to 11 months last year.
Volkswagen is number two (but regressing 12,5%) with a 9,1% market share, and there is a tight battle for place three to five, Peugeot (7,41% market share) winning at the moment before Audi (7,34%) and Mercedes (7,19%).
Big losers this year are Renault (-36,1%), Alfa Romeo (-35,8%), Fiat (-28,1%), Jeep (-26,7%), Honda (-24,5%), DS (-23,3%), Dacia (-22,2%), and Land Rover (-20,5%). It’s clear that the Alliance and the Stellantis group are the manufacturers which regressed the most.
Apart from BMW, there are almost no winners among the more prominent brands. Instead, considerable progress is reserved for new or small brands like Cupra, Polestar, MG, Smart, Subaru, etc. Still, we’re always taking small numbers here. Luxury brands like Bentley (100 cars, +6,4%), Ferrari (133 cars, +2,3%), and Porsche (2 767 cars, +4,1%) are still doing very well.
In the Hexagone, this November has been one of the worst, even 3,2% less than in the same month last year when the dealers were in lockdown half of the month. All-in-all, the French market stays at a quarter less than in the normal year 2019 and still suffers from the semiconductor shortage. Here also the luxury brands see a reverse tendency (+77% compared to last year).
The biggest losers are the two domestic manufacturers, Stellantis (-30,5% for the first 11 months compared to 2019) and Renault (-28,2%). The foreign brands suffer less, with VW at -20,5%, and others at even less. Hyundai-Kia is even progressing and has jumped above 5,4% market share. The French automotive platform PFA is still expecting some 1,7 million cars sold in 2021, slightly more than in the ‘catastrophic year’ 2020.
With a 31,7% lower sales volume in November 2021 compared to 2020, the problems due to the semiconductors shortage are not gone yet, on the contrary. In fact, the year 2021 will be worse than the (first) pandemic year 2020.
The German federal automotive Agency (KBA) noted 2,4 million cars were sold during the first eleven months of this year in Germany, which is 8% less than in 2020. Ferdinand Dudenhöffer of CAR (Center for Automotive Research) thinks that the whole year sales will end up at 2,69 million, also 8% less.
“The German market has never been so bad since the Reunification,” says Dudenhöffer. “The secondary effects of the pandemic (chips shortage, turbulence in the logistic chain, more expensive raw materials, have destabilized the world market in 2020 and beyond.”
“Germany suffers a lot,” he continues. “Car production has fallen back by 32% in November (-12% for the last 11 months) and it won’t be much better in 2022. A serious revival shouldn’t be expected before 2023, and even then the figures of 2019 won’t be beaten.”
Meanwhile, electrified cars continue to progress. Pure electric cars now sell more than diesel cars in Germany (20% market share against 16%), while gasoline still remains the market leader with 33%. But if you count in PHEVs, 34% of the market is already electrified.
The most successful brand in Germany is still Volkswagen (15% market share), although the sales went down -42%. The second brand here is Mercedes with 10% of the new car market.
During November, 17,5% fewer cars were sold in the Netherlands compared to last year, and over 11 months, the decline is more than 8%. The best-sold car here is already for a certain time an electric one, this time, it was the Skoda Enyaq, followed by the Kia Niro.
A remarkable feat was established by Lynk&Co, obtaining fifth place with its 01 model, which is mainly rented with a monthly subscription fee instead of being sold.
The sales in Russia continued to regress in November (-20,4% compared to last year). For the first 11 months, there’s still light progress (+6,9%), but only if you compare it with the figures of the pandemic year 2020.
“Apart from all the negative factors in the market (production down, semiconductor shortage, logistic problems), there’s also the Russian government initiating laws that make the situation even more difficult,” says Thomas Staertzel, CEO of the Association of European Businesses (AEB).
Staertzel points at the nine-fold higher cost one pays to get rid of an electric car in Russia, combined with the fact that electric cars will now also pay import taxes. “These are decisions that will seriously hamper a market segment that’s only starting to develop in Russia,” Straetzel adds.
The UK seems to be the exception confirming the rule in November. Last month, 115 706 cars were sold over there, and that’s 1,7% more than last year. Of course, here also one has to be careful comparing solely to 2020, the pandemic year. The November sales figure is still 31,3% below the average of the five years before the pandemic (2015-2019).
The motor of the market in November was an electric one. In November, two times as many electric cars were sold as last year. They already represent 18,8% of the total market, a number that goes up to 28,1% if you count in hybrids.
The Society of Motor Manufacturers and Traders (SMMT) is worried about the deployment of infrastructure. According to SMMT, the number of rechargeable cars has gone up from 11 to 16 per charging point in the last two years. The association calls upon the authorities to remedy that as soon as possible.
The Japanese market seems to recuperate from the big blow it observed in September and October (minus 30%), also due to the chip shortage. In total, the market has only regressed 13,4% in November.
Toyota is still the biggest loser (-18,8% in November), and brands like Honda (+3,8%) and Nissan (+2,2%) even progressed. The Kei car (a mini-car very typical for the Japanese market) stays very popular, with sales totaling more than 60% of regular cars.
All over the world, we see markets suffering from the enduring semiconductor shortage influencing the worldwide car market. This also causes a skew in the market toward more expensive and electrified models.
As semiconductors are hard to find, manufacturers tend to reserve them for more expensive cars with more interesting profit margins, electrified vehicles being part of this. The average buyer with a restricted budget is the loser.
So, it’s far from astonishing that many people are turning to the second-hand market to find a car. Almost all over Europe, the second-hand market is booming, with prices rising every month. As long as the chip shortage remains a problem, this tendency will still increase.