Tech

Car sales plummet 20% in Europe due to war in Ukraine

Due to production difficulties caused by the war in Ukraine and shortages of electronic components, sales of new cars in Europe collapsed by 20% in March 2022. This is a record not reached since 1990.

European car sales drop
Credits: Unsplash

As you know, the war in Ukraine is already having a direct impact on many industries in Europe, starting with the automobile industry. Already in March 2022, many specialists all agreed that the selling price of cars was going to increase. Blame it on the difficulties on the production line encountered by manufacturers, linked in particular to the conflict but also shortages of electronic components.

Their predictions have indeed turned out to be correct, as the latest report from the European Builders Association (ACEA) reveals. According to the organization, sales of new cars on the Old Continent fell by 20.5% in March 2022, with a total of 844,187 vehicles sold over the period. This is a historic record, since it is the most low sales volume for a month of March since the creation of this statistical study in 1990.

Of course, the association does not take into account the year 2020, during which the world economy was paralyzed due to the pandemic. What explains this drastic drop in sales? Without surprise, shutdown of several factories in Ukraine because of the war has undermined the production capacities of European car manufacturers, already impacted by shortages of electronic components.

The war in Ukraine weighs on car sales in Europe

It should be noted that Ukraine is one of the Europe’s Leading Wiring Harness Suppliers, essential components that help conduct current to a car’s electrical equipment. For lack of parts, several brands have already announced the suspension of the manufacture of certain models, like Volkswagen which stopped production of the ID.3 and ID.4 because of the shortage of chips. Indeed, the German brand has temporarily suspended the activities of Zwickau, its production center dedicated to electric cars. The European number 2 Stellantis was forced to close its factory in Russia, because of the shortage here again.

This is also the case in France, where Renault closed the doors of the Douai factory for ten days. Unsurprisingly, we find this drop in sales of new cars in several European countries:

  • Germany: -17.5%
  • France: –19.5%
  • Italy: – 29.7%
  • Spain: – 30.2%
  • Poland: – 17.4%
  • Belgium: – 17.7%
  • Sweden: – 39.5%

Be that as it may, manufacturers agree that sales targets will have to be adjusted if the situation persists.

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