Car sales in Europe rose for a fourth month in November as supply chain problems continued to ease, although a worsening economic outlook threatens to weigh on demand in the coming months.
The European Automobile Manufacturers Association said new car registrations rose 17% to more than 1 million units last month. Total sales are still down about 6% from the first 11 months of last year.
Deliveries have improved in recent months as shortages of semiconductors and other components have improved. The order book remains full, which should help earnings through early 2023. But the industry has yet to recover to pre-pandemic levels and probably won’t be immune to a third straight year of decline, according to Bloomberg Intelligence.
Analysts at LMC Automotive said they expect the supply bottlenecks that have limited production to ease throughout next year. Market researchers are less optimistic about demand, citing high inflation rates, waning consumer confidence and stretched household budgets.
“We think 2023 will easily outpace 2022, although we are a bit more cautious,” the analysts said, also slashing their sales forecast for Western Europe to below. 11 million.
Some manufacturers have sounded the alarm about the impact of escalating inflation. volkswagen AG warned this week that electric vehicle sales in Europe have been “deviated” in recent months as soaring energy prices begin to weigh on demand.
high-class luxury car has been relatively flat this year, and automakers are still benefiting from unfilled orders that accumulated during the height of the supply chain crisis. Several manufacturers, including Stellantis NV, are still reporting logistics issues.
Kepler Cheuvreux predicts a 5.3% drop in total registrations in Western Europe by 2022, including a 15% drop for luminaires commercial vehicleare often more sensitive to macroeconomic deceleration. The number of registrations is likely to remain far below pre-pandemic levels next year, Kepler analysts wrote in a December 13 note.
Registrations in November increased by about 24% in the UK, 31% in Germany and 15% in Italysaid the association. VW was the standout performer last month with a 37% increase from a year ago.
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