European Automobile Manufacturers Association: New car registrations in Europe fell 13.7% year-on-year in January-May 2022

The four major EU markets all recorded double-digit declines, with Italy recording the largest drop (-15.1%). Affected by inflation and supply chain disruptions, new car sales in Europe fell for the 10th consecutive month. The latest data released by the European Automobile Manufacturers Association on Thursday showed that new car registrations in Europe fell 11.2% to 791,546 in May, marking the 10th consecutive month of decline. The four major EU markets all recorded double-digit declines, with Italy recording the largest drop (-15.1%), followed by Spain (‑10.9%), Germany (-10.2%) and France (-10.1%).

From January to May 2022, new car registrations in Europe fell 13.7% year-on-year. All four major markets fell, with Italy leading the decline (-24.3%), followed by France (-16.9%) and Spain (-11.5%), and Germany (-9.3%) with the smallest decline.

Among the major automakers, Volkswagen was the hardest hit, with its sales in May down 19.6% from the same period last year. Affected by the continued decline in sales, its US ADR has also fallen by more than 30% this year.

Although market expectations for a gradual improvement in the supply chain continue to heat up, pessimistic expectations of slowing demand due to record inflation in the eurozone and a slowing global economy have repeatedly dampened auto sales expectations.

According to the latest data released by the European Statistical Office, the eurozone's initial harmonized CPI rose 8.1% year-on-year in May, hitting a new record high, following a 7.4% increase in April. The PPI was even higher, reaching 37.2%.

To make up for lost sales, many European automakers have raised prices and shifted production to more expensive models with higher profit margins, a strategy that could face headwinds as consumers cut spending to put money where it’s needed most.

LMC automotive, an automotive industry data forecaster, lowered its forecast for full-year passenger car sales in Western Europe again this month, the fifth time this year. LMC automotive now expects shipments to be around 9.8 million this year, a 7.4% drop from 2021.

From Wall Street News