The pandemic, the shortage of semiconductors, and the continued push for electrification produced some interesting facts about the global vehicle market in 2021. While the global total increased by 5 percent to around 82.1 million units (passenger cars, vans, and light commercial vehicles included), not all countries posted positive figures. And that's still below a pre-pandemic level of 89.6 million vehicles in 2019. Let's look at some numbers.
China remained the top market with 26.3 million vehicles, up 4 percent from 2020 and 6 percent from 2019. Production woes haven't hit China as hard as other regions, due to the strong boost from the central government which has made electric cars more affordable. China's auto industry has been the big winner from the crisis that began to hit global markets two years ago.
This is not the case in the United States. Despite a tiny recovery in 2021 ( up 4 percent versus 2020), the 15 million units sold were still far from the 17 million in 2019. Unlike China and Europe, this market has yet to benefit from the boost in EV sales, as the numbers indicate. In 2021, pure electric vehicles accounted for only 3 percent of the market, while they accounted for 11 percent in China and 10 percent across Europe.
But the EV boom was still not enough to offset the negative effects of the last couple of years, as European nations can tell. Light vehicle registrations fell 25 percent between 2019 and 2021, or 4.04 million units. This is a massive drop. Historically, the European vehicle market was similar in size to the US market. However, that has changed with the gap jumping from 1.15 million units in 2019 to 3.2 million last year.
Italy Falls From The Top 10
Difficulties in Europe's primary markets account for the drop. For example, Italy, which was historically among the top 10 largest vehicle markets in the world, came out last year in 12th position behind Russia. In 2019, Italy was 9th in the market with nearly 2.1 million units, behind Brazil at 2.68 million and ahead of Canada at 1.93 million.
It's a similar story in Germany, France, the United Kingdom, and Spain, which all show declines between 22 percent and 31 percent between 2019 and 2021. Despite the difficulties, Germany, France, and the UK still rank in the top 10, with Germany the leading European nation in the 5th spot.
The emergence of EVs across Europe is boosted by various government incentives, but that doesn't necessarily reduce EV prices enough for them to be serious internal-combustion alternatives. Tighter emissions regulations also factor into EV production, but higher EV prices could leave a lot of buyers holding the bag, unable to afford a new electric car under the current conditions.
South Korea, Chile, Turkey Gain Positions
The situation is much better in other markets such as South Korea, Chile, and Turkey. In fact, South Korea literally swapped places with Italy over the last two years, climbing from 12th to 9th. Chile was able to cope better with the crisis because it has no local industry; everything is imported. This is the main reason why it overtook Argentina and became the second-largest market in South America. Argentina has 2.4 million more inhabitants than Chile.
Turkey jumped from 25th in 2019 to 18th last year, overtaking South Africa, the Netherlands, Saudi Arabia, Poland, Belgium, and Thailand. The reason? As happened in 2020, new cars have become a safe commodity for saving money and protecting against the strong devaluation of local currencies.
The author of the article, Felipe Munoz, is the Automotive Industry Specialist at JATO Dynamics.