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Thursday, February 3, 2022

Global Auto Sales To Rebound As Chip Shortage Expected To Ease In Q3 2022

Automotive analyst firm LMC Automotive sees global auto sales improving in 2022, but only if carmakers are able to weather the chip shortage all the way until the third quarter of this year.

Overall, global light vehicle sales are forecasted to rebound 6.2 percent to about 86.2 million. This is lower than 2019’s pre-pandemic 90.2 million, but significantly higher than 2020’s 77.8 million and 2021’s 81.2 million. Global automotive production is expected to return to pre-pandemic levels no earlier than 2023.

LMC Automotive predicted that gains will be spread evenly around the world. Europe sales will increase by 7 percent; North America 6 percent; China 5 percent; South America 9 percent; and the rest of Asia, including India, 7 percent.

That said, automakers will continue to struggle to build enough cars to satisfy demand through the first three quarters of this year, LMC Automotive says. Production for 2022 is expected to be 84.9 million vehicles, a big increase from 75.8 million in 2021.

Compared to pre-pandemic levels in 2019, production will be down 12 percent in the first quarter, 5 percent in the second and flat in the third quarter. A rebound will gather force in the fourth quarter, when it will rise by 4 percent compared with 2019.

Ford took the biggest hit among automotive groups, with 2021 production down by 26 percent, representing a loss of 1.26 million units, because of the chip shortage. General Motors lost 21 percent of production, Volkswagen Group lost 13 percent, Stellantis 13 percent, and Renault-Nissan 10 percent.

The carmakers’ struggle in 2021 resulted in new car inventories hitting their lowest point in 2021. And while inventories are expected to rise throughout 2022 thanks to more chip supplies, it is unlikely to be sufficient to meet the increased demand. LMC Automotive predicts that supply may tighten again around the end of 2023.

That said, full production stoppages attributed to the chip shortage should end by the second quarter of this year in favor of lower output. Approximately 4.8 million units of production will still be lost in 2022, however.

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