European car market collapses in September

Production line of cars at the German manufacturer Volkswagen, February 25, 2020. AFP - RONNY HARTMANN

Text by: RFI Follow

1 min

The European automobile market is collapsing.

In September, it returned to its 1995 levels, underlines the Association of European Manufacturers.

The reason: the shortage of microchips is hitting the industry hard. 

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In September, around 719,000 new cars were sold in Europe, a drop of just over 23% year on year.

Major markets, such as Germany, Italy, France and Spain, all saw double-digit declines.  

In a context of recovery in global economic activity, the shortage of semiconductors penalizes production in the automotive industry.

Vehicles are in fact more and more equipped with electronic systems.

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Toyota cuts production by 15%

Except that manufacturers find themselves in competition with other chip-hungry industries, such as manufacturers of computers, smartphones or connected objects.

These industries absorb a large part of the electronic components produced mainly in Asia.

The phenomenon is global: it affects all manufacturers.

The automotive giant Toyota, for example, has just announced a 15% reduction in its overall production in November.

If the shortage is not resolved quickly, the auto industry may experience the same production problems again next year.

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• European Union

• Automotive