Europe may be currently reporting an acceleration in auto sales in China and the United States following the coronavirus, but over the next two years it is expected to show strong performance with percentage growth at double digits with a resumption of pre-pandemic levels by 2023.
This is the view of forecaster LMC Automotive in a report, which also expected the global industry to experience steady growth after a downturn inspired by a semiconductor shortage in the first half of 2021. Global sales will reach 88 million in a full year, rising to 93 million. in 2022, 97 million in 2023 and 100 million in 2024.
According to Fitch Solutions, global auto sales peaked at 92.5 million in 2019.
Investment bank UBS has reduced its global forecast for 2021 from 87 million to 86 million, while in 2022, it forecasts 89 million in sales.
Sales were strong in the United States, despite the semiconductor issues.
“While demand has grown well above expectations, primarily in North America, semiconductor supply constraints require a moderate reduction in our forecast. We expect the second quarter (Q2) to mark the low point in global car sales and production, with 10-12% of global volume lost / delayed due to chip shortage, ”UBS said in a report. .
Sales in the United States reached an annual rate of 18.5 million in April.
“However, as demand is likely to remain strong globally, pent-up demand in Europe is accelerating in the 2nd halfway through 2021 after a weak performance since the start of the year, the sector will remain subject to supply constraints. Given the low inventory levels, especially in North America, it will likely take a long time to 2022 to replenish car dealership lots, which bodes well for production in the coming quarters, ”UBS said.
UBS has signaled some uncertainties next year. The rapid rise in commodity prices will trigger around 5% further price increases for vehicles, in addition to the 6-10% increases in transaction prices seen to date due to the current shortage of supply.
“Price elasticity of demand could therefore become the main headwind next year in an otherwise favorable sector environment,” the bank said.
Data and analytics firm GlobalData agrees recovery in global vehicle sales after coronavirus shutdowns is in full swing, but impact is uneven, with demand in the United States increasing as European forecasts are revised on the decline.
“Western Europe is furthest from the January 2018 base, while the US market has suffered the least impact from COVID-19. Indeed, the US market continues to perform above expectations, ”said Calum MacRae, Automotive Analyst at GlobalData.
Western Europe includes all major markets like Germany, France, UK, Italy and Spain.
“The US market is currently fueled by the fiscal stimulus and a feeling of FOMO (fear of missing out) among consumers. The fear is driven by dealer inventory depletion to historically low levels due to chip supply issues that hampered production in the industry in the first half of the year, ”MacRae said.
“GlobalData figures also show strong demand for new vehicles this year in China, even though the Western European market is experiencing a patchy recovery. New vehicle sales in Western Europe in April hit roughly the same level as the month before, but markets have been disrupted by ongoing COVID-19 population movement restrictions. Our latest forecast for the world – at 86.1 million for the year – still considers 2021 to be some 3.3% below the 2019 total, but don’t be too surprised if the market ends closer to 2019. than many are currently anticipating, ”MacRae said.
LMC Automotive estimated that globally the chances of repeat lockouts have diminished, thanks to vaccination programs. Concerns about infection on public transport mean at least a short-term boost in personal mobility, while the biggest problem will likely be the shortage of supplies, as stocks have been depleted by high demand. and a production disruption due to the semiconductor shortage.
Downside risks in Europe include any disruption to vaccination plans, other possible waves of different covid variants, and semiconductor shortages. Possible benefits include the accumulation of savings and pent-up demand which could support more robust demand.