Lowest European car sales since 1996 due to supply issues following a 12-month decline

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Just over 1.06 million new passenger cars were registered in Europe in June of this year—the lowest since 1996—with several automakers reporting sales declines of nearly 50%, according to data from the European Automobile Association.With almost a quarter fewer sales than last June, Volkswagen was the major automaker most negatively impacted.However, Stellantis has experienced the greatest drop thus far, falling 21.1 percent in the first half of the year.

Jaguar Land Group saw a less severe decline in June, down 13.2%, but the worst hit this year, down 34.7 percent.Volvo’s new registrations plunged 47.9 percent in June and 28.5 percent for the first half of the year.

A few of the issues affecting the region’s auto industry, which has now recorded 12 straight months of decreases, include inflation, supply chain bottlenecks, an increase in coronavirus infections in several nations, and a continuing chip shortage. Prior to the release of their second quarter results later this month, major automakers, including Stellantis and BMW, have recently announced declining sales globally. Spain, Italy, Germany, and France—the four biggest markets in the European Union—all reported declining car registrations.

Due to an easy year-ago comparison, sales in important areas like Germany and the UK may start to increase again this month. While that means there may be a chance for the industry to end a 12-month run of declines, it will be challenging to make up for output losses in the first half. LMC Automotive now predicts that Western European passenger car deliveries will fall 6.3 percent this year to 9.92 million.

Demand forecasting is still challenging because of the possibility of worsening energy shortages. This week, the primary pipeline carrying Russian gas to Europe was taken offline for maintenance, and Berlin and its allies are preparing for Putin to permanently halt supplies as revenge for the sanctions and backing given to Ukraine.

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