We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now
The chip shortage cost the global auto industry an estimated lost production of 7.7 million vehicles in 2021. Picture: GETTY IMAGES
The chip shortage cost the global auto industry an estimated lost production of 7.7 million vehicles in 2021. Picture: GETTY IMAGES

International sales of cars and light commercial vehicles (LCVs), such as vans and pick-ups, are expected to increase by 6% in 2022, says UK-based automotive consultancy LMC. However, uncertainty persists about the impact on production and sales of the continuing global shortage of semiconductor microchips.

Most motor companies expect the drought to ease in the second half of this year. Chipmakers, however, say it could persist to the end of the year and even into 2023. It says much about the uncertainty that while some analysts say the continuing shortage could cut planned production by 1-million vehicles in 2022, others say the eventual figure could be nearly 5-million.

Microchips control onboard vehicle technology, including engine management and safety systems. But they are also used by other industries. In 2021, producers could not keep pace with pent-up demand caused by Covid and the global motor industry had to scrap production of nearly 8-million vehicles, at an estimated cost of more than $200-billion..

Reuters reports that the European Commission is preparing legislation to promote semiconductor research and production in Europe, to reduce dependence on outside suppliers, most of which are in Asia.

Precise 2021 global vehicle sales and production numbers are still unclear. While major markets have reported their figures, the International Organisation of Motor Vehicle Manufacturers was this week still waiting for some small ones to complete calculations.  

Germany’s automotive industry association, the Verband der Automobilindustrie, says combined car sales for Europe (including the UK), Russia, the US, Japan, Brazil, India and China totalled 58.2-million in 2021. That was 3.9% better than the previous year’s 56-million.

Those figures do not include LCVs. LMC says combined global car and LCV sales of just more than 80-million are expected to rise 6% to 86-million in 2022. At the company’s annual sales and forecast announcement last week, MD Peter Kelly said Europe was likely to see sales grow by 7%, North America 6%, South America 9%, China 5% and the rest of Asia 7%.

The European Automobile Manufacturers Association (known as the ACEA for its French name, the Association des Constructeurs Européens d’Automobiles) is more bullish, predicting 8% growth in its region.

In SA, Mikel Mabasa, CEO of Naamsa/the Automotive Business Council, recently predicted an 8% increase in local sales of cars and trucks in 2022. The National Automobile Dealers Association this upped the stakes , forecasting 10%-15% growth. SA , like most of the world, expects sales to return to pre-Covid levels only in 2023.

What won’t return to international pre-Covid levels is the market profile. A report by the International Energy Agency (IEA) says electric vehicles (EVs), including battery-electric and plug-in hybrids, increased their share of the global car market between 2019 and 2021, from 2.5% to nearly 9%.

Within the EU, says the ACEA, plain hybrids, which run on dual electric and liquid-fuel engines and don’t require recharging, accounted for 19.6% of new cars, compared to 11.9% in 2020. “Electrically chargeable vehicles also saw a strong increase in sales, making up 18.0% of total car registrations, up from a 10.5% share in 2020.”

Another IEA report says SUVs are beginning to dominate EV sales. In recent years, these vehicles, with their perceived versatility and go-anywhere ability, have snatched a big share of the car market. However, it has been hard to prise buyers away from petrol and diesel models.

The IEA report says: “In 2021, for the first time ever, the electrification ratio of SUVs matches the electrification ratio of non-SUV cars. In both the US and the EU, electric SUVs are expected to account for more than 55% of all electric car sales in 2021.”

LMC reckons that by 2032, EVs and hybrids will account for 53% of all new-car sales around the world.

First, though, manufacturers must sort out a troubling inconsistency. A few years ago, motor companies were forced to admit that their fuel efficiency and exhaust emission claims for petrol and diesel vehicles bore little relation to reality. Tests were conducted under laboratory conditions and results could not be replicated on roads.

(This had nothing to do with “Dieselgate”, in which companies deliberately falsified emissions claims.)

Now a similar thing is happening with EVs. Reuters last week quoted EU sources as saying that current carbon dioxide emissions tests on plug-in hybrids yield results up to four times below what they actually emit out on the roads. Conducted under controlled conditions, they underestimate how much the vehicles rely on their petrol and diesel engines.

The Reuters report says: “Changing the test to better reflect real-world emissions backs a growing consensus among environmental groups and regulators that plug-in hybrids are not as green as once thought and should not be treated equally to battery-electric vehicles when designing policy to encourage electrification.”


Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.