Statistics from many countries show that the recovery of the auto industry has gathered pace this year, with sales of electric cars rising significantly. Industry insiders believe that the current global auto industry as a whole has not recovered to the level before the epidemic, due to chip shortage and other factors, the complete recovery of the auto industry is still a period of time.

International credit rating agency Standard & Poor's recently issued a report, raised the global auto industry growth forecast. The report predicts global vehicle sales of about 83 million to 85 million vehicles in 2021, an 8 to 10 percent increase. Standard & Poor's analysis said that after the severe impact of the epidemic in 2020, the global auto industry gradually accelerated the pace of recovery, especially since the second half of last year, some countries adopted relevant support policies and stimulus measures, driving car sales.

Sales continued to grow in many places

During the epidemic period, governments of many countries, relevant industry organizations and automobile companies took various measures to promote the recovery of the automobile market, which further drove the recovery growth of the industry.

According to data released by the China Association of Automobile Manufacturers (CAAM), from January to June this year, China's auto production and sales reached 12.569 million and 12.891 million units respectively, up 24.2% and 25.6% year on year respectively. The growth rates of auto production and sales increased 3.4% and 4.4% respectively compared with the same period in 2019. The production and sales of new energy vehicles reached 1.215 million units and 1.206 million units respectively, with year-on-year growth of two times. Compared with the same period in 2019, the production and sales of new energy vehicles increased 94.4% and 92.3% year on year.

Driven by strong demand in overseas markets, South Korea's top five auto makers -- Hyundai, Kia, GM, Renault, Samsung and Ssangyong Motor -- increased their output by 23 percent year-on-year to 3.05 million vehicles in the first five months of this year. Overseas sales by the top five auto makers rose 66 percent in May to 480,000 vehicles, maintaining high growth.

More than 890,000 passenger cars were sold in the European Union in May, up 53.4 percent from the same month last year, continuing the recovery, according to data released by the European Automobile Manufacturers Association. Since the prevention and control of the epidemic, EU member states have supported the recovery of the automobile industry through industry subsidies and subsidies for car purchases. The EU last year temporarily cut the value-added tax on cars and increased government support for energy efficiency and emissions cuts in the car industry. The EU also plans to spend €3bn - €4bn to support the construction of car battery factories in Europe.

New figures released by the Association of Automobile Manufacturers and Dealers say more than 186,000 cars were sold in the UK in June, a 28% increase on the same month last year. Almost 910,000 cars were sold in the UK in the first six months of the year, up 39.2 per cent on the same period last year. It expects UK car sales to reach 1.86 million units this year.

In South Africa, the willingness of many consumers to buy cars increased significantly in the first half of this year. More than 38,000 cars were sold in South Africa in June, up 20.2 per cent year on year, according to the Automotive Business Council of South Africa. In the first half of this year, South African car sales rose 40.1% from the same period last year, showing signs of recovery. From July 1 this year, South Africa began to implement new car regulations, including the sale of new vehicles will not be tied to the price of maintenance, insurance and other services, is expected to further stimulate car consumption.

Electric cars are doing well

Electric, intelligent and networked are the development trend of automobile technology, especially the rapid development of electric vehicles, which have become a bright spot in the recovery of the automobile industry.

Globally, there is a growing trend towards electrification of cars. ING analysis said that many countries around the world emphasize the economic green recovery after the epidemic, China proposed 2025 new energy vehicle sales volume to reach about 20% of the total new car sales, the European Union put forward the "green recovery plan", all of these are favorable factors for the development of electric vehicles.

This year, electric vehicles have made up a significant share of sales reported by countries and automakers. As carbon emission standards rise and many countries propose a timetable to ban the sale of fuel vehicles, electric vehicles will have more room for development.

At the moment, Europe is a standout for electric vehicle sales. Pure electric vehicles and plug-in hybrids will account for 15-20 per cent of total vehicle sales in Europe in 2021 and are expected to account for 30 per cent by 2025. The European Union has set a goal of 30 million electric vehicles by 2030, and most member states have also set a timetable for banning the sale of fuel vehicles, hoping that all new cars will be electrified within five to 15 years.

About 1.63 million new car registrations were registered in the UK in 2020, a sharp drop of 29.4% year on year, but the registrations of pure electric vehicles and plug-in hybrid electric vehicles bucked the trend, rising by 185.9% and 91.2% respectively, accounting for 10.7% of total vehicle sales in the country, much higher than the 3.1% recorded in 2019. In June, UK sales of plug-in hybrids and pure electric vehicles reached 48,131 units, up nearly 100 per cent from the same month last year, a significant increase in sales.

The government says all new cars sold in Japan will be electric by 2035. The U.S. government has announced plans to invest $174 billion to accelerate the deployment of electric vehicles through sales subsidies, tax incentives and charging networks. According to some analysts, the proportion of electric vehicle sales in the US will increase from the current 2% to 10% by 2025.

According to S&P analysis, electric vehicle sales will continue to grow this year and will account for between 6 and 8 per cent of global vehicle sales, up from 4.4 per cent in 2020. The large-scale popularization of electric vehicles requires the construction of more charging piles and the increase of automobile battery supply service points.

Full recovery will take time

While the global auto industry is recovering steadily, it is also showing uneven regional development. Standard & Poor's analysis said that China's personal car consumption heat is not abated, car consumption still has a large room for growth, but in the United States, Europe and other markets, the recovery of the auto industry is much slower than expected.

In Europe, despite encouraging sales data for May this year, European car sales are still not reaching pre-epidemic levels, and new car registrations are 25.8% lower than in May 2019, indicating that the European car market is recovering more slowly than expected.

Automakers are also under pressure to further reduce emissions and meet carbon standards. This year, chip shortages have hampered a recovery in auto production in many countries. Volkswagen, Daimler, Toyota and other major automakers have been forced to announce plans to cut production as a result of a shortage of chips that has left many automakers with idle capacity. Industry insiders expect chip shortages to continue into next year.

According to the analysis, with the acceleration of automobile electrification and intelligence, the chip usage is increasing and becoming more and more high-end, which brings pressure to the supply chain. Currently, various restrictions caused by the epidemic have led to supply chain disruptions. Chip manufacturers in the United States and Japan have been affected by extreme weather, fires and other factors, and some chips have not been delivered on time. The chip industry chain is long, and some auto manufacturers do not plan and layout in advance, resulting in problems in the supply of automotive chips.

In response, the EU announced yesterday that it was considering creating a "chip alliance" to reduce import dependence at a time when global semiconductor supply chains are strained. The EU wants Europe's share of global semiconductor production to rise to 20 per cent by 2030, from 10 per cent now, with almost all of Europe's chip demand met domestically.