"Supply chain issues will constrain results through this year and into 2023," LMC said in a report this month.
But even as supply chains gradually improve, weakening demand due to record inflation and a slowing global economy are clouding sales forecasts.
"The demand side situation is becoming increasingly gloomy," LMC said, noting that consumer confidence in Europe is now lower than at the start of the pandemic in early 2020.
To make up for lost sales, many automakers have increased prices and shifted production to their most expensive models that yield greater profits. But that strategy could face limits as consumers struggle more broadly with inflation. According to a recent poll by German public broadcaster ARD, nearly half of the country's citizens plan to cut back spending this year.
Registrations fell by about 10 percent in both Germany and France, and by more than 20 percent in the UK.
Bloomberg contributed to this report