Europe sales rise the most in nearly 2 years as supply shortages ease

New-car sales in Europe jumped the most since May 2021 as supplies of key components including semiconductors continue to improve.

Registrations in the EU, EFTA and U.K. markets jumped 26 percent in March to 1.42 million, the European automakers’ lobbying group ACEA said on Wednesday in a statement.

The result extended the industry’s growth streak to eight consecutive months.

Automakers are benefiting from orders accumulated during the worst of their supply crises and a weak year-ago showing.
 
While parts shortages are easing, automakers are now contending with elevated inflation rates and slowing economies — factors expected to weigh on sales as the industry attempts a complicated shift to electric vehicles.

“An easing in supply constraints has strengthened the pace of deliveries to customers,” LMC Automotive said in a report this month.

“Downside risks remain, with countries experiencing recessionary conditions that will be impacting underlying demand.”
 
Last month’s gains were especially pronounced in Spain and Italy, where sales expanded 66 percent and 41 percent, respectively.

In Germany, the region’s largest market, registrations increased 17 percent, while in France they were up 23 percent and 18 percent in the U.K.

Last year’s March sales were held back by the war in Ukraine, which disrupted supply chains and fueled raw-material inflation.

Volkswagen Group and Renault led gains among major European automakers with respective increases of 35 percent and 27 percent.

Sales of full-electric cars surged 43 percent, lifting their market share to 15.5 percent.

VW’s namesake brand this week unveiled the ID7 at the Shanghai auto show, its first full-electric sedan, to compete with models from Stellantis and Tesla.

Mercedes-Benz plans to double its EV sales globally this year, CEO Ola Kallenius told Bloomberg Television on Tuesday.

The share of EVs “is likely to grow this year as more models become available and supply-chain issues ease,” Bloomberg Intelligence analysts Gillian Davis and Michael Dean said in a note Tuesday.