We used Indicio to forecast passenger car sales for 2022 in the European Union and do not expect new car registrations to return to pre-pandemic levels this year

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The current situation

Estimates are based on an average of 15 models that rely on ACEA data and automotive industry leading indicators, weighted according to best performances. As the semiconductor shortage severely struck the sector and forced car makers to halt production in 2020 and 2021, obtaining a new car is currently subject to several months’ delays.

How did we get to that conclusion?

We accounted for the shortage and set it to last until 2023 so that the models capture these disturbances. Indicio trained the models on data from January 2003 to February 2017 and assessed out-of-sample accuracy between March 2017 and November 2021.
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“Demand for cars recovered rapidly after the pandemic turmoil and is waiting to meet a currently disrupted supply. ”

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The chart below shows the predicted trend for 2022:

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December estimates should remain stable compared to November figures with 707K (621K – 799K) vehicles registered (-0.8% MOM) but still -31.4% compared to December 2020. Following off-peak in January and February, we estimate a seasonal uptrend in March and June 2022 with registrations peaking at 978K (851K – 1.11M) and 1.02M (869K – 1.18M).

The second half of the year will see a return to lower levels with August figures at 574K (416K – 742K) and a shy uptrend to reach until December 2022 at 660K vehicles (95% Confidence interval: 495K – 837k). Demand for cars recovered rapidly after the pandemic turmoil and is waiting to meet a currently disrupted supply. For this reason, these estimates may be raised throughout the year if the sector sees improvements with the semiconductor shortages. (95% confidence interval)
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