Significant decline in car sales during the pandemic is not yet to rise soon

Overview of the crisis in the car sales market

Pre-pandemic car sales figures will not recover until 2024, according to forecasts by Faconauto, the employer's association of dealers. After a 2021 that will end with sales of around 850,000 units, no big change is expected in 2022, with the most optimistic forecasts reaching 968,000, while the most pessimistic scenario would remain at 900,000.

Two threats to car sales next year will mark the bottom line. On the one hand, the microprocessor crisis, which no one knows exactly when it will be resolved. On the other hand, the increase in the Registration Tax, which if there is no surprise, will become effective from January of next year, which could cause the loss of between 70,000 and 100,000 additional registrations, according to Faconauto's calculations. In addition, around 250,000 purchases corresponding to 2020 orders that could not be delivered will be affected by the tax increase that affects 8 out of every ten vehicles and that represents more than an extra 4 percent in its price.

And it is that, as the president of Faconauto, Gerardo Pérez, has affirmed, "the car does not admit more taxes". Something that has been evident in Catalonia, where the CO2 tax has meant lower sales figures than usual. Faconauto advocates for the elimination of these taxes on purchase but on use, especially on older cars.

There are three challenges facing car distribution, according to Gerardo Pérez. On the one hand, the sustainable transition, environmentally, but also economically. Sustaining employment and wealth, with an orderly transition. He points out that dealerships are number 1 in charging points.

Secondly, digitization, to which its platform responds, but maintaining omnichannel because there are customers who buy online but others who prefer a physical exhibition. And thirdly, the demographic challenge, because "if Spain is emptied, the dealers are emptied".

The VO continues to be the great support of dealers, they say, second-hand cars for which dealers are paying higher prices than usual but also that are sold at higher prices than usual. After-sales is the other leg that supports the dealership and that has increased by 13 percent in 2021 compared to 2020 thanks in large part to the leasing of individuals and the contracting of credits linked to guarantee increases.




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