New registrations in March: bottlenecks cause car market to crash

As of: 04/05/2022 16:22

New registrations in the German car market fell sharply again in March. Production was also significantly reduced. The reason is the bottleneck in electronic chips and semiconductors.

The bottleneck in electronic chips and semiconductors caused the collapse of the German car market last month. According to the Federal Motor Transport Authority (KBA), 241,330 new cars hit the roads in March, around 17.5 percent less than in March 2021. Consequently, there was an especially steep drop in new commercial registrations. with more than a fifth, while private customers registered ten percent fewer cars.

Looking at the first quarter of this year as a whole, the number of new registrations is also declining: 625,954 passenger cars were registered for the first time in Germany in the first three months. That was 4.6 percent less than the same period last year.

Also significantly fewer plug-in hybrids

Compared to March 2021, all German brands saw declines in new registrations: Opel (down 37.8 percent), Mini (down 35 percent), VW (down 31.8 percent) and Smart (down 30 percent). .8 percent) lost particularly high. Sales of Mercedes, down 26 percent, and BMW, down 15.5 percent, also fell by double digits. With 16 percent of all new registrations in March, VW was the biggest brand.

For the first time in a long time, some of the so-called alternative impulses were also affected by the March drop. The number of purely electric cars increased by 14.5 percent to almost 34,500 units. However, with just under 27,300 plug-in hybrids, significantly fewer new vehicles were registered than in the same month last year (35,600 plug-in hybrids).

In the first two months of 2022, the sales of German automakers recovered slightly. Around February, 200,512 new cars were registered, 3.2 percent more than the previous year.

The auto industry expects less production

According to the German Association of the Automotive Industry (VDA), the reason for the drop in March remains the bottleneck in electronic chips and semiconductors. In March, production in Germany fell 29 percent to 267,600 vehicles. Since the beginning of the year, negative production has been twelve percent.

Due to the Ukraine war, the VDA is also slashing its forecast, only expecting production to rise seven percent to 3.3 million cars for the full year. Previously, it had forecast 13 percent growth. The industry association announced that foreign production would also increase by two percent to 9.6 million vehicles, only half of what was assumed last time.

The adjustments are an initial reaction to the war in Ukraine and its consequences for supply chains and the global economy, VDA President Hildegard Müller said. “The extremely dynamic circumstances, in particular the possible extension of the sanctions against Russia and additional factors of uncertainty, such as the possible production losses in China as a result of the Covid-0 strategy, could necessitate a further adjustment of the forecasts in the next months. “

End of the “unpredictable” crisis

For its part, the management consultancy EY explained that recently the number of new registrations in other European countries has also been declining. In France they fell by 19 percent, in Italy by 29 percent, in Austria by 30 percent and in Spain by 32 percent.

The pre-crisis level was therefore “even further away”, according to EY. “The production crisis in the auto industry has worsened significantly in recent weeks,” said Peter Fuss, an expert on the auto market.

Bottlenecks in the supply of microchips and other preliminary products have been a problem for a long time, “but now there are massive bottlenecks in the supply of various raw materials and other intermediate goods,” says Fuss. “We are currently seeing more price increases and even longer lead times.” The end of the crisis “is not foreseeable”.

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