A VW dealership. The group's European sales fell 22 percent in May over the same month in 2021.
European new car sales fell for the 11th consecutive month as record inflation and falling consumer confidence joined prolonged supply-chain disruptions.
Registrations in the 27 EU members plus the UK and the EFTA countries fell 13 percent to 948,149 vehicles in May, industry association ACEA said Thursday. Hardest-hit among major automakers was Volkswagen Group, which saw sales drop by 22 percent from the same month last year.
Asian automakers, however, showed gains for the month. Hyundai Group sales were up 9.8 percent, Nissan sales rose 3 percent, and Toyota Group (including Lexus) increased sales 1 percent.
That left Hyundai Group, which sells the Hyundai and Kia brands, No. 3 in group sales behind VW Group and Stellantis. Hyundai Group increased its market share by 2.1 percentage points to 10.2 percent.
Among other major automakers, Stellantis sales were down 15 percent; Renault Group lost 9.8 percent despite a 12 percent rise for budget-brand Dacia; BMW, including Mini, was down 13 percent and Mercedes-Benz, including Smart, lost 8.3 percent.
After nearly a year of decline, automakers have recently seen glimmers of improvement, reporting that some supply constraints -- such as the lack of semiconductors -- are beginning to ease. A Bloomberg Intelligence report predicts European car sales will pick up in the second half of this year.
Even so, the depth of sales losses during the first half of the year have taken a toll. Forecasters at LMC Automotive cut their estimate for full-year Western European passenger-car sales again this month, the fifth time this year. They now expect 9.8 million deliveries this year, a 7.4 percent decline from 2021. In January, LMC predicted sales would grow by 9 percent.
"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
