(Bloomberg) -- Automakers sold almost 2 million fewer cars in Europe during the first half compared with two years ago, as the industry’s recovery in the region falls short of the rebound seen in the U.S. and China.
Registrations rose 13% in June compared with a year ago, bringing the total in the first six months to 6.49 million cars, according to the European Automobile Manufacturers’ Association. While that’s a 27% increase from the first half of last year, it’s well below levels the industry was accustomed to prior to the pandemic.
Europe’s slower pace of vaccinations and longer-lasting measures to contain the spread of Covid-19 kept a lid on sales early in the year, while the global shortage of semiconductors also constrained automakers’ ability to maintain inventory. The dearth of chips will continue to pinch production for years to come, according to the chief executives of Volkswagen AG (OTC:VWAGY), BMW AG (DE:BMWG_p) and Renault SA (OTC:RNLSY).
“With the further easing of lockdown measures and subsequent support from an improving economic backdrop, selling rates should pick up over the second half of this year,” analysts at LMC Automotive said in a report. “Risks lie on the downside, as the semiconductor supply shortage threatens to disrupt the post‐lockdown rebound in demand.”
The slower sales recovery in Europe is having little effect on the bottom lines of VW and Stellantis NV (NYSE:STLA), the region’s two largest auto manufacturers. The former is benefiting from strong deliveries in China, while the latter is cashing in on buyers snapping up lucrative Jeep sport utility vehicles and Ram pickups in the U.S.
VW last week reported that earnings surged to 11 billion euros ($13 billion) in the first half, while Stellantis said its profit margin for the period should exceed its 5.5% to 7.5% forecast for the year.
Ford Motor (NYSE:F) Co. is getting a boost from a “breathtaking” rise in pricing, CEO Jim Farley said last month, after issuing a much better financial outlook. Mercedes-Benz maker Daimler AG (DE:DAIGn) similarly said Thursday that its sales skewed to more lucrative models last quarter.
Stellantis posted the biggest sales gain among major automakers in Europe during the first half with a 32% increase, ahead of VW group’s 29% advance. Renault’s registrations slumped 19% last month, limiting the French carmaker to a 7% gain through June.
In the luxury segment, BMW got the better of rival Daimler (OTC:DDAIF) both last month and in the first half. The Bavarian brand was up 21% in June and 31% year-to-date, while Mercedes registrations slumped 13% last month and increased 18% so far this year.