China, US Lead Global Auto Sales Recovery; Lagging Europe controls the electrical charge

2021 after COVID-19 global economic situation. World economy, economics, finance, industry and … [+] Market sectors potential recovery. Up and down arrows for stock chart, world map in the background

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Global auto sales are rebounding strongly from coronavirus-induced economic disruption, although regional disparities remain as China leads the recovery, followed by the US and Europe lagging behind.

Such is the view of S&P Global Ratings in a report released Tuesday that also said Europe is leading the march towards electrification.

The semiconductor shortage disruption remains of concern, but the impact has varied widely across industries, with Ford F Motor Co being hardest hit. S & P Global Ratings expects world sales to increase by between 8 and 10% in 2021 to 83 to 85 million, compared to 77 million in 2020.

Global auto sales peaked at 92.5 million in 2019, according to Fitch Solutions.

“The visibility of the semiconductor shortage crisis is still very low and hopes for a recovery in the second half of the year are fading. The effects on individual automakers are very different, ”says the report.

According to S&P Global Ratings, this latest forecast was slightly stronger than the previous one as pent-up demand and government stimulus had boosted sales throughout 2020. Low inventory levels had suggested a rapid recovery in vehicle production this year.

“However, we have realigned our forecasts significantly since the end of last year due to the shortage of electronic components, compounded by unexpected supply chain disruptions in 2021, such as the fire at a major Renesas Electronics Corp semiconductor supplier in Japan and Canada ( Weather) issues in Texas that triggered the shutdown of chip manufacturing plants. We now expect replenishment to be delayed until 2022 and 2023, ”the report said.

The effects on production are still difficult to assess.

“The effects of the chip shortage vary greatly from company to company. Ford already had a 17% negative impact on its planned production in the first quarter, compared to 11% at Stellantis, the group that emerged from the merger of Peugeot and Fiat Chrysler Automobiles earlier this year. Ford has now announced projected cuts of up to 50% in the second quarter, resulting in a loss of more than 1 million vehicles in 2021. This leads us to believe that our initial estimate of net loss production of up to 3 million for the industry as the whole of 2021 was potentially too optimistic, ”the report said.

The forecast for sedan and SUV sales growth in 2021 assumes that China will increase 7% to 26.2 million, Europe will increase 18% to 10% and the US will increase 16% to 16.6 million. have risen.

“The recovery in global auto sales is uneven across all regions. China and the US are driving the recovery in global demand for automobiles, supported by the recovery in private consumption in China and massive economic stimulus in the US, ”the report said.

Electric car sales are accelerating, with Europe leading the way, although hurdles have yet to be overcome.

“The mass introduction of electric cars still requires a much more detailed charging infrastructure and local supply chains for battery cell production. Europe is currently leading the way: battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV) will account for 15 to 20% of the European market in our base scenario in 2021 and 30% by 2025 with an expected market penetration of 6 to 9% in China, although we believe the Chinese market will regain its position as the largest EV market over time. “

“In the US, the Biden administration announced a $ 174 billion pledge to accelerate the use of electric vehicles, including discounts and tax incentives at point of sale, and a national network of 500,000 chargers by 2030. These developments suggest that in our base case, electric vehicles, including plug-ins, will account for 10% of US light vehicle sales by 2025. Last year, the share of these vehicles was barely 2%. “