Strong demand, weak supply chains

Strong demand, weak supply chains

Gerhard Schwartz, partner at EY Austria, analyzes the situation on the market: "The lack of chips is blocking an upswing in the new car market. That's a shame because demand is high at the moment, but the car industry is currently not in a position to satisfy it." Schwartz estimates that it will take two years to build additional semiconductor production capacity and that the acute crisis will be over by the end of the year. “We have a robust economy and the pent-up demand promises catch-up effects.” According to the EY expert, the problems with semiconductors result in long delivery times and low new car sales, but manufacturers could definitely enforce higher prices in the current environment: "Manufacturers are reacting to the semiconductor shortage by making adjustments to the model mix. There are hardly any compromises when it comes to pricing - this is not a particularly favorable environment for bargain hunters."

The electric boom continues

Austria increased the market share of electrified new cars significantly in August: almost a quarter (24.4%) of the new cars sold in this country were electric cars or plug-in hybrids. A significant jump compared to the same month last year, when only 8.4 percent of new cars were electrified vehicles. “Subsidies and tax advantages keep interest in vehicles with electrified drives at a high level,” observes Schwartz. He expects sales growth for new electrified cars to gain momentum again in the coming months. Demand is increasing not only due to new, sustainably oriented values, but also due to increasingly attractive offers. Car manufacturers are constantly bringing new electric cars and plug-in hybrids onto the market in different price segments, which are also getting better and better when it comes to range. The market share for purely electric cars in Austria is currently 18.1 percent. The proportion of plug-in hybrids in this country is only 6.4 percent.

Diesel continues to lose

The increase in electrified new cars is causing the market share for pure combustion engines to continue to decline. The diesel drive in particular is losing enormous importance: in Austria, its market share fell from 38.1 percent in August 2019 and 36.8 percent in August 2020 to just 22.7 percent in August 2021. In the top 5 markets, only 17.4 percent of all new cars are diesel engines - a year ago the proportion was 28.8 percent and in August 2019 it was 30.4 percent. “If the boom continues, more electric cars than diesel cars may be sold in Western Europe next year,” predicts Schwartz.