‘Black 2021’: Car sales plunge; US, China, Europe and India report decline
Passenger vehicle sales fell the world over in the month of October as the crippling shortage in semiconductor chip rages on. Most prominent car makers confirmed a challenging passage of play and blamed shortage of crucial components as the main driving force pushing sales down even if demand in many markets remains rather robust.
While Covid-19 had brought with it big challenges, the global automotive industry is currently in the firm grip of an unprecedented shortage of semiconductor chip - a crucial component in modern-day vehicles as well as a large number of consumer electronic items. The impact from this shortage isn't uniform but is rather omnipresent.
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US car sales
Major manufacturers in the US saw sales decline by varying margins last month vis-a-vis figures from the same month in 2020. The prediction was for overall car sales to come down by 20% but individual OEMs reported different figures.
Ford, for instance, recovered but sales were still down 4%. Hyundai, Kia and Honda saw sales fall for the third straight month. “Every automaker has been struggling. There's some incremental improvement happening over the last month or so but we are actually talking very marginal improvement," Garrett Nelson of investment research firm CFRA was quoted as saying by Market Watch.
China car sales
What's happening in China also has a deep-rooted impact on the global automotive scenario. It is, after all, the world's largest car market. But although official figures are not yet available, China Automobile Dealers Association (CADA) has estimated auto sales in the month of October would be down by nearly 12%.
The Chinese economy has shown signs of a slow down and there are concerns here over two key sectors - real estate and auto. And any production hits will have a direct impact on overseas markets as well because facilities here serve as base for OEMs exporting to other countries.
Europe car sales
It has been tough going for automakers across Europe with several months of slide reported. Such has been the situation that prices of pre-owned vehicles have, in some cases, shot beyond the price of its brand new version in the UK. There are just not enough new vehicles to meet with the demand in many countries here.
Take the case of Spain.
Sales of new vehicles here fell by 21% to 59,044 units, according to Automotive News Europe. Sales in the month were down by a higher 37% when compared to the same month in the pre-pandemic year of 2019. 2021, therefore, has been termed as a ‘black year’ by many industry groups here.
Sales in France too have slid by 31% with 118,521 units sold last month. While companies like Hyundai, Dacia and Jeep managed to carve out positive figures, other power players like Renault Group, Volkswagen Group and Stellantis Group reported sizable dips in sales.
It was the same sorry tale in Germany as well where new car sales fell by around 34% last month. The challenge is real and being felt in many other countries in the continent.
India car sales
October always brings with it a whole lot of festive cheer in India and the auto industry tends to make merry while the celebrations last.
Not this year.
The Federation of Automobile Dealers Association (FADA) recently highlighted that the current festive period in the country has been the worst in a decade, in terms of vehicle sales. Maruti Suzuki and Hyundai - two of India's biggest players in the passenger vehicle segment, reported big fall in October sales. Others are hardly faring much better.
Much like in many other parts of the world, demand remains rather strong but production and supply-related issued - caused primarily by parts' shortage and rising input costs - have come as a double blow.