The shift to electric mobility, the pandemic, component shortages, and various other factors are changing the dynamics of car markets around the world.
Italy is home to some of the most iconic car brands and has been closely associated with the conceptualization and development of many technologies and products, in the super premium, premium and mass market segments. The market here has long held a place of prominence on a global stage, but not anymore. According to figures processed by UK Motor1, Italy dropped out of the list of the 10 largest car markets in terms of light vehicle sales in 2021. Light vehicles are the best-selling vintage of passenger cars and as such, the integral output is likely.
Recent years have dramatically changed the equations in the global automotive industry due to prevailing, often unprecedented situations. The Covid-19 pandemic has been raging since early 2020, while crippling shortages of semiconductor chips are also having an effect. The shift towards electric vehicles and the volatility of international oil prices are two other important factors determining buyer preferences. The data reveals that while around 82 million passenger vehicles were sold globally in 2021, a five per cent increase from 2020, some countries like Italy fared weaker.
The curious case of the Italian car market
The Italian car market was the 12th largest, according to data based on global light vehicle sales in 2021 compiled by Motor1. The country saw around two million sales and fell behind Russia, but managed to stay ahead of Mexico. This is a tectonic shift because the Italian market has traditionally always found a place in the top 10.
Sales have fallen not only in Italy, but also in markets such as Germany, France, the UK and Spain, even if most of these countries still feature in the top 10 list. Experts say strict emission standards in many of these countries mean governments are prioritizing public transport options, electric vehicles, or both. In the case of electric vehicles, the vast majority of people may not yet be able to afford one or may want to wait longer.
China fires full steam ahead
China remains the world’s largest auto market, both in terms of production and sales. And for quite a distance. The country saw an estimated 26.3 million vehicles sold in 2021, a four percent increase from 2020. And this is still significantly higher than the around 15 million vehicles sold in the US last year. . The United States ranks second, but China’s push into electric vehicles is likely to help the market here extend leadership over other markets.
India holding steady
There have been numerous challenges for the Indian auto industry, some even before the pandemic. The switch to BS 6 emission standards was followed by the outbreak of the Covid-19 pandemic, while semiconductor shortages remain pervasive. The basic reality is that while demand for passenger cars here remains strong, according to the Society of Automobile Manufacturers of India, production and supply can’t exactly keep up. Nonetheless, India remains the fourth largest car market in the world, behind Japan and ahead of Germany, France, the UK, Brazil and South Korea.
First publication date: April 15, 2022, 10:06 a.m. IST