EU New Car Sales Drop, European Automakers Open Lower
EU Car Registrations
New car registration slumped 22.8% year-over-year in December 2021 in the European Union, as per today's data from the European Automobile Manufacturers' Association (ACEA). [1]
This was the sixth consecutive month of decline, with most regions having faced double-digit drops. A total of 795,295 new passenger cars were registered in December 2021, down from 1,030,551 a year ago.
For the whole of 2021, there were 9,700,192 new vehicles registered in the European Union, down 2.4% from 2020. The report cites "the semiconductor shortage that negatively impacted car production throughout the year, but especially during the second half of 2021" as the reason for the slide in new car sales last year.
Germany's registrations fell 26.9% year-over-year in December and 10.1% during the full 2021.
The auto industry is very important for the European economy and as per the European Automobile Manufacturers' Association it accounts for 6.6% of all EU jobs and for more than 8% of the EU's GDP.
Broader Risk Aversion
The poor sales report weighs on the stocks of major European car makers and the GER30, but sentiment is generally poor today. Aggressive tightening expectations around the Fed and Middle East tensions are some of the factors that are in play.
The ECB is far behind in the tightening path than its major counterparts, as it is expected to begin reducing its asset purchases from March, but where the Fed goes, everyone does.
Tensions in the Middle East spiked overnight after a drone strike in the United Arab Emirates, one of OPEC's largest oil producers, sending USOIL and UKOIL to their highest levels since October 2014.
Market Reaction
As a result of these developments, some major European car makers open lower today.
BMW.de had risen above 100.00 for the first time since December 2015 last week, helped by solid sales figures for 2021. Today however, it sheds more than 1%, breaching 98.00.
France's Renault Group announced yesterday a decline of 4.5% y/y in 2021 sales, with 2,696,401 vehicles sold. [2]
The Renault brand was responsible for most of those sales, with 1,693,609 units, a 5.3% drop compared to 2020.
Renault's electrified vehicles accounted for 30% of last year's passenger car sales in Europe, up from 17% in 2020.
Today RNO.fr trades more than 1% lower, following yesterday's profits.
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Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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