European car manufacturers are bracing for increased competition and lower demand in the second half of the year.
The EU automotive semiconductor supply gap has now largely abated, but logistical disruptions, high inflation and macroeconomic headwinds will create problems for the industry later this year.
European automakers have strong order books into the second quarter, and supply and demand are expected to reconcile by the third quarter after supply-side problems normalize. The removal of these logistics and supply chain barriers, combined with an expected decline in orders, is forcing some automakers to brace for increased competition.
Weaker supply positively affected the first quarter
Mood in the European auto industry in were generally positive in the first quarter, with vehicle registrations showing significant signs of improvement and inventories returning to normal levels after years of severely tight supply. EU car registrations increased 18% year-on-year to 2.7 million units in January-March, according to data from the European Automobile Manufacturers Association.
At the same time, the Stellantis car group had 1.3 million units inventory at the end of the first quarter, up 21%…
