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15 Aug, 2021 14:28

Global auto market keeps shrinking as vehicle sales drop due to chip shortage & Covid delta variant

Global auto market keeps shrinking as vehicle sales drop due to chip shortage & Covid delta variant

Sales of new light vehicles across the world showed a decline of 6.3% in July compared to July 2020, according to the latest data from LMC Automotive, Michigan-based provider of automotive-industry-focused forecasting.

Meanwhile, sales of new light vehicles across the world saw a robust year-on-year growth of 22% in the first six months of 2021.

According to the report, around 6,463 million units were sold in July globally, marking a significant year-on-year decline of more than six percent compared to July 2020, when the consultancy recorded sales of nearly 6,899 million units.

“The semiconductor shortage held back the post-lockdown recovery of vehicle sales in Europe, while its impact on inventories in the US meant average transaction prices soared,” the report highlights. 

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The experts added that rising Delta variant cases may worsen the outlook in some parts of Asia.China remained the world leader, with some 1,842 million new light vehicles sold in the country in July, marking a decline of nearly 10% compared to the same period a year ago. 

“Most global brands suffered YoY declines due to the supply issue stemming from the global chip shortage, while Chinese brands, such as GAC Motor, Great Wall and Changan, continued to perform well,” the analysts reported.

LMC Automotive expects the fast spread of the Delta variant across China and tightened social restrictions to present a risk to economic activity and new vehicle sales.

The US fell to second place as sales there of new cars saw a year-on-year growth of 3.2% to nearly 1,278 million units. According to the consultancy, the US market continued to be impacted by low inventories during July.

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