Supply chain shortages continue to limit markets

The US light vehicle market ended March with 1.25 million units sold, down 22% from March 2021 (which was a solid month). The US market continues to be affected by a shortage of parts which is generating extremely low vehicle inventories.

The annualized sales rate (SAAR) was just 13.4 million units in March, according to GlobalData unit, LMC Automotive.

In March, General Motors also led the market, although it finished the first quarter behind Toyota. Indeed, Toyota’s RAV4 was the only vehicle to sell more than 100,000 units in the first quarter. Tesla also consolidated its leadership in the premium segment, overtaking BMW by around 20,000 units.

March 2022 was the fifth weakest month for US light vehicle sales since 2000.

In the first quarter, sales totaled 3.29 million units, down 16% from the first quarter of 2021. Historically, and under normal demand conditions, volume would have been closer to the 4 million mark. at this point of the year.

LMC analysts now expect supply chain disruptions to last through 2022. Global light vehicle sales are now expected to rise just 1% to 82.6 million units – a forecast that saw a reduction of almost 3 million units since February.

Augusto Amorim, Senior Manager, Americas Vehicle Sales Forecasts, LMC Automotive, told Just Auto that Toyota is handling the chip shortage better than Ford: “Although March sales were slightly better than expected, there are still a lot of market disruptions. General Motors outsold Toyota in March, but ended the quarter behind its competitor. They were the only two OEMs to sell more than 500,000 units in the first quarter. Still, Toyota’s RAV4 was the top-selling vehicle in the United States for the second month in a row as chip shortages continue to further hurt Ford production. The F-150 was overtaken by the Chevrolet Silverado and the Ram 1500 in March.

Amorim also points out that among established OEMs, only Mazda and Tesla sold more than in March 2021. Additionally, Tesla is increasingly positioning itself as the leader in the premium segment, selling more than 100,000 units in a quarter for the very first time. “Tesla was ahead of BMW by about 20,000 units,” he notes.

There were no major surprises in the various segment performances, but a pick-up in sales of the Chevrolet Equinox and Honda CR-V propelled the compact SUV to the top of the sales charts. It’s also the segment that fell the least among the five most popular, down 10% year-on-year, compared to an 18% decline in midsize SUV sales. Small SUVs saw the biggest decline at -37% year-on-year as OEMs continued to focus on more profitable models.

LMC has cut the outlook for U.S. light vehicle sales in 2022 as the recovery is expected to be hampered by lack of inventory. Volume is now expected to end the year at 15.3 million units, down 500,000 from last month. The pace of recovery should now be slower than it was at the start of the year. First quarter North American production levels are expected to be approximately 50,000 units lower than we had forecast last month, and periodic downtime and slower line rates continue to limit supply.

Additionally, LMC says the extension of supply disruptions will likely extend into 2023, resulting in a reduction of 400,000 units which brings primary volume for the year down to 16.5 million units, still an increase. 8% compared to 2022.

Jeff Schuster, President, Americas, Global Vehicle Operations and Forecasting, LMC Automotive, said: “Given the March performance, we believe the risk is balanced in the second quarter, but there is additional downside risk in the second half. , as we still expect the sell rate to improve. at an average of 16.2 million units against a forecast rate of 14.3 million units in the first half. Vehicle pricing remains a significant headwind, even as supply improves. The pandemic and the fallout from shortages in the supply chain have fundamentally changed the buying process, including the amount of inventory held on dealer lots and the level of incentives going forward. The industry will recover, but many will likely operate differently than they have historically.

Western Europe’s SARAR drops to just 9 million a year in March

The sales rate of passenger cars in Western Europe fell to 9.0 million units/year in March, from 10 million units/year in February, bringing the average for the first quarter of 2022 to just 9.6 million. units/year. LMC describes the start of 2022 in Europe as “very disappointing as the automotive industry continues to be impacted by supply issues”. To make matters worse, the war in Ukraine only compounds these problems.

In Germany, the pace of sales fell slightly to 2.4 million units/year in March, against 2.7 million units/year previously. UK PV sales rate fell to 1.2m units/year in March from 1.9m units/year

in February. For France, the rate of sales remained at a disappointing level of 1.4 million units/year. In Spain, the sales rate fell to 574,000, from 700,000 units/year previously, after a truckers’ strike delayed deliveries. Finally, in Italy, the rate of sales fell to 1.1 million units/year in March, against 1.2 million units/year in February.

LMC’s forecast for Western Europe has been lowered since last month as registration statistics continue to languish in the face of supply bottlenecks, exacerbated by the war. “We still expect sell-through rates to improve through 2022, but now at a slower pace than expected last month,” said LMC analyst Jonathon Poskitt. “The war will also reduce underlying demand, through higher and longer inflation and lower real incomes, although we believe the initial impact on registrations will be felt in worsening supply constraints, for, at least for the moment, the demand always exceeds the supply.

Russian light vehicle market down 63% in March

The war in Ukraine and its economic impacts have already caused the collapse of the Russian car market. Figures released by the AEB in Moscow show that the Russian light vehicle market (cars and LCVs) in March fell by 62.9% to just 55,129 units sold, equivalent to an annual market of less than 700,000 units.

Contrary to usual practice, the AEB’s press release containing the data was notably devoid of any commentary on the data or market developments from a member of the AEB’s automaker committee.

Analysts predict that the Russian auto market will experience a sharp decline this year due to much weaker economic growth and market supply issues. Western brands have halted shipments of vehicles and parts to Russia, and domestic producers are struggling to get parts from abroad.

Market data from GlobalData shows that the Russian light vehicle market reached 1.67 million units in 2021, about 4% more than last year. Analysts expect major shutdowns of auto manufacturing plants in Russia this year in the face of continued supply disruptions and much weaker demand. However, much will depend on the evolution of the Ukrainian crisis during the rest of the year and its economic repercussions.

One possibility is that Chinese automakers will fill the void caused by the absence of Western brands.

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