Europe slammed by Covid-19 and semiconductor shortage

New car sales in Europe set an unenviable record last year – the worst for 36 years – as the market slumped to a level not seen since 1985. Overall volume dropped by 1.7% from 2020, which was already a very bad year.

Germany spearheaded the decline, down 10.1%, largely due to the slump in production of key models by Volkswagen, which also slowed progress in the penetration of the EV market – one of the few sectors in which sales grew for other brands.

Stellantis was a beneficiary of the growing EV market, meanwhile, as it gained traction in this important segment.

The UK was negatively affected by both the chip crisis and consumer uncertainty, although on the upside, it surpassed France to become the second-largest EV market in Europe.

JATO ANALYSIS

“In Europe, the chip shortage affected the availability of new cars, while manufacturers prioritised chips for the most profitable and incentivised cars: SUVS and EVS. But these cars aren’t the most affordable ones. As long as Europe doesn’t have genuinely affordable EVS, growth won’t be enough to offset big drops in diesel and petrol car sales.”