Zhitong Financial APP noted that car sales will increase in 2022 as the auto industry gradually overcomes supply chain difficulties and increases production as much as possible to meet market demand. The following article will list a series of forecasts for the development of the automobile industry in 2022 based on the actual situation of last year.

The auto industry recovered in 2021, but to a lesser extent than expected

In recent months, there has been a lot of negative news about the auto industry, but in fact, after a painful 2020, the industry has still achieved some recovery in 2021. Although the overall growth rate of the industry in 2021 is clearly affected by a shortage of semiconductors, overall car sales have rebounded since the outbreak. However, overall sales in 2021 are still 10 per cent lower than in 2019.

Although supply chain constraints remain, the auto industry is expected to grow in 2022

Given the background of supply chain bottlenecks caused by semiconductor shortages in 2021, there is a view that as supply chain problems ease, 2022 is likely to be a healthier recovery year for the automotive industry than 2021. The market expects consumer demand for cars to remain stable in 2022. Therefore, once the supply bottleneck begins to eliminate, sales will increase rapidly. It is reported that some analysts expect global car sales to grow at a rate of 4% to 6%, while the increase in production will exceed the increase in sales by about 2 to 3 percentage points to make up for the loss of sales during the interruption in 2021. Of course, this favorable situation is based on the gradual improvement of the supply chain, which is the main factor restricting the expansion of the industry.

After the introduction of new regulatory and strategic measures, the development of the tram industry will be further accelerated.

It should be noted that in 2021, the trend of car electrification in the industry can be described as a "spring breeze". Both established car companies and new tycoons in the industry are scrambling to launch their own electric vehicle products. Analysts believe this trend will continue to strengthen in 2022.

In addition, in 2021, governments have stepped up efforts to popularize electric vehicles: the European Union has set a goal of transforming electric vehicles into electric vehicles by 2035; the Biden government has set a goal of electric vehicles accounting for 50% of car sales by 2030.

On the corporate side, almost all major manufacturers reaffirmed or announced their strategic plans to transform electric vehicles in the next 10 years in 2021. For example, the world's largest carmaker$Toyota Motor Corp (TM.US) $A major investment plan has also been announced recently, with the goal of selling 3.5 million electric vehicles over the next decade.

The proportion of global electric vehicle sales is steadily increasing.

In the first three quarters of 2021, the share of European electric vehicles (pure electric vehicles + hybrid vehicles) in total new car registrations rose to 17%, almost double that of the same period in 2020. By 2022, this proportion is expected to exceed 20%. The data reflect that Europe is now ahead of this trend, but at the same time China's share of electric vehicles in car sales has also shown strong growth. In addition, the United States is expected to catch up from 2022 against the backdrop of new government subsidies and more available models.

It is reported that globally, s & p expects electric vehicles to account for 7-10% of total annual car sales by 2022. As electric vehicles become more and more mainstream and the number of cars becomes more and more, the construction of charging infrastructure becomes crucial to promote the growth of the industry. But in the short term, this should not affect tram sales in 2022.

The chip problem is still the key.

Whether car production and delivery targets can be achieved by 2022 will depend on the manufacturer's actual production capacity. Over the past year, the shortage of chips has been putting pressure on production targets. Delivery times for new cars have been extended last year, and most automakers are facing a backlog of orders that they need to complete and reduce.

At the same time, the supply of chips is still tight, and the COVID-19 epidemic could still lead to new supply disruptions. As a result, the semiconductor problem will continue to be a major bottleneck for automakers by 2022.

In addition, at present, automakers have been focusing on high-margin models and electric vehicles. In the long run, electric vehicles consume about twice as much chips as conventional internal combustion engines.

Since it usually takes two to three years to expand production or build new plants, chip production capacity has been slow to adapt to changing demand. For example,$Taiwan Semiconductor Manufacturing Co Ltd (TSM.US) $A production facility in Texas was announced in 2021 and will not be operational until 2024. The difficulty of increased supply, coupled with continued strong demand for chips in the automotive industry, suggests that the chip shortage is likely to persist to some extent this year.

It is understood that some unwilling carmakers have begun to establish partnerships with various suppliers. For example,$F.US (Ford) $Positive and$GlobalFoundries (GFS.US) $Cooperate to ensure future supply. Although the final supply may still depend on a few large manufacturers, the establishment of partnerships will still make the process of ordering chips easier.

In fact, in addition to semiconductors, battery supply is becoming more and more critical as demand soars. Many carmakers have begun to set up joint ventures with battery makers to ensure future supplies. The question for car companies in 2022 is whether the supply of trams can keep up with the fast-growing demand of the market. It is reported that Volkswagen plans to build six battery production plants in Europe by 2030, but its plant in cooperation with Northvolt will start production in 2023, while some other battery manufacturers$TotalEnergies SE (TTE.US) $ 、$STELLANTIS (STLA.US) $Factories owned by Mercedes-Benz and Mercedes-Benz will also start production in 2023. This means that the global automotive industry will remain highly dependent on Asian battery suppliers such as LG for some time to come.