Europe’s car forecast turns negative, while power sales growth stagnates

The outlook for car and SUV sales in Western Europe is rapidly fading, with forecasts falling into negative territory as the economic outlook weakens, and even the heavy-duty electric car revolution is set to take a break during of the next two years.

Top forecaster LMC Automotive now expects sales in Western Europe to fall 6% in 2022 to just under 10 million, citing supply chain bottlenecks, war in Ukraine and lockdowns in China due to the re-emergence of the coronavirus.

Battery electric vehicle (BEV) sales in Western Europe more than doubled in 2020 to just under 750,000 and jumped again in 2021 with sales of 1,143,000, or 10.3% of the market. Schmidt Automotive Research expects this to slow over the next two years.

“The consensus before the Russian invasion was for a growth rate of 10-15% this year over 2021 levels (BEV). This is now expected to be cut in half,” Matt Schmidt said.

Over the next two years, as European Union (EU) regulations remain constant, manufacturers will be able to focus more on selling highly profitable internal combustion engine (ICE) cars and SUVs.

“From 2022 to 2024, BEV penetration will only increase by one percentage point due to the primary driver and key benchmark of legacy manufacturers, fleet average CO2 targets (EU), remaining constant until in 2025 with little wiggle room with suppliers despite rising sentiment for electric vehicles,” Schmidt said.

“Improving semiconductor conditions at the end of 2022 will lead to a higher total volume market in 2023 (13.8 million), likely suppressing BEV penetration growth as models become available. Entry-level ICE will return, giving non-plugins a boost,” Schmidt mentioned.

At the start of the year, LMC Automotive confidently forecast sales to increase by 8.6%. But the unexpected invasion of Ukraine saw a sharp correction to a barely perceptible 0.4% gain in 2022 to 10.63m, and now that minus 6% expected. In the pre-covid world of 2019, sales in Western Europe reached 14.29 million.

Western Europe includes all major markets of Germany, Great Britain, France, Spain and Italy.

Western Europe’s annual sales rate fell to 8.8 million in April from 9.0 million in March, LMC said.

“Our forecast for 2022 has been lowered since last month and now sees a year-on-year contraction for the Western European market. Global supply issues show no significant signs. easing, while the outlook for underlying demand is also eroding.Consumer confidence in the Eurozone has fallen over the past two months, now at a level not seen since the initial emergence of the pandemic in 2020, and households will experience a serious squeeze in real income this year. Supply issues, however, remain the main determinant of enrollment at the moment,” LMC said in a report.

Many of the world’s car industry leaders are in London this week to attend the Financial Times conference, ‘The Future of the Car’. Volkswagen CEO Herbert Diess, Mercedes CEO Ola Kaellenius and Renault CEO Luca de Meo are speakers on Monday, likely to get grilled, not so much on the groundbreaking new products they plan for the future, but how they will maintain the stability of their ships. unexpected slowdown.

Mary I. Bruner