Chip crisis recovery on horizon
Grounds for optimism after global shortage caused car production to slump by 26%
The global semiconductor shortage that has curtailed car production for the past 12 months is expected to ease by the end of this year, but there remains plenty of pain for new car buyers to work through in the next few months.
The numbers from 2021
Another 9.6 million vehicles would have been made last year if not for the shortage, estimated LMC Automotive. The analysis company prides itself on accurate production forecasts but was forced to make cut after cut on its prediction of a better 2021 after a woeful 2020 as the shortage bit ever harder.
LMC estimates that the worst-hit manufacturer was Ford, which it reckoned lost 1.26 million cars globally, followed by the Volkswagen Group at 1.15 million and General Motors at 1.09 million.
In Europe, new car sales were down 1.5% on pandemic-hit 2020 and by a whopping 26% from the 2018-2019 average, LMC said.
How 2022 is shaping up
This year, the production volume lost to the shortage will be halved to 4.8 million, LMC has estimated.
However, would-be buyers are still going to have to wait.
“Right now we have the biggest order bank that we’ve ever had. If there were free supply, I think the industry would be booming,” Kia UK boss Paul Philpott told Autocar last month. “People have money to spend.”
“Demand is still outstripping supply, and that’s particularly acute in mature markets [like Europe and the US],” said LMC managing director Pete Kelly.
Insufficient capacity in fabricator plants is now being tackled as a matter of urgency by Europe and the US, which want to reduce their dependency on Asia for chips.
The EU has even introduced the European Chips Act in order to subsidise local development of semiconductors, with American tech giant Intel indicating that it’s on board.
That new capacity won’t come through in 2022. But even so, providing that there are no new complications, new car supply should return to some kind of normalcy by the end of the year.
Who is faring best
The Hyundai Motor Group was the biggest gainer in Europe in 2021, selling 1.02 million Hyundai, Kia and Genesis cars, up 21% on 2020 to put it ahead of the Renault Group, according to the European Automobile Manufacturers Association.
Toyota also did well, boosting sales of Toyota and Lexus cars to 760,178, up 9.6%.
HMG sales should return to pre-covid levels this year, vicepresident Gang-hyun Seo said last month, predicting a return to normal chip production in the third quarter of the year.
The chip crisis has also been navigated well by the Chinese car industry in general.
“Light vehicle production is starting to outpace retail sales in China, indicating the industry there is getting a grip far more than in the US and Europe,” said Kelly.
That’s translating into good supply for MG, whose average monthly sales actually grew throughout 2021 to reach a 30,600 total, putting it above Citroën, Renault and Honda.