EU car sales expected to drop again this year; auto makers call for urgent policy action

“To ensure a return to growth – with an even greater share of electric vehicle sales so climate targets can be met – we urgently need the right framework conditions to be put in place,” said ACEA President and CEO of BMW, Oliver Zipse, during an ACEA reception last night.

“These include greater resilience in Europe’s supply chains, an EU Critical Raw Materials Act that ensures strategic access to the raw materials needed for e-mobility, and an accelerated roll-out of charging infrastructure.”

“The last years have been marked by major events like Brexit, the coronavirus pandemic, semiconductor supply bottlenecks and the war in Ukraine, with its impact on prices and availability of energy,” Zipse continued. “All of these things underline how quickly, how profoundly and how unpredictably our world is changing. This applies not least in the geopolitical context – where there are direct consequences for our globally interconnected industry and its close-knit value chains.”

The impact of these challenges is reflected in recent EU car sales figures. Eight months into 2022, overall volumes contracted by almost 12% to reach some 6 million new cars sold. So far, the market was only constrained on the supply side as ongoing component shortages constrained production volumes. However, demand may also suffer over the coming months due to inflation and fears of recession.

With all these factors in mind, ACEA has now revised its initial forecast that the EU car market would return to growth in 2022. Instead it expects that it will shrink again this year, slipping by 1% to 9.6 million units. Compared to the 2019 pre-pandemic figures, this represents a drop of 26% in car sales in the space of just three years.

“Despite the contracting market and pressure from inflation and energy costs, the automobile industry continues to invest massively in R&D and in the skills and technologies driving the green and digital transition,” explained ACEA’s new Director General, Sigrid de Vries.

“Such a vast transformation can only be successfully achieved by an industry that remains competitive well into the future. This is also strongly dependent on the right political framework conditions,” de Vries added.

To ensure a return to growth, the auto industry calls for greater resilience in Europe’s supply chains, an EU Critical Raw Materials Act for strategic access to the raw materials for e-mobility, and an accelerated roll-out of charging infrastructure.