Global car sales are expected to start recovering in the final quarter of this year, as the shortage of computer chips begins to ease, according to UBS analysts.
A worldwide shortage of semiconductors has been dragging on the car industry since late last year and many car makers have expressed caution about production for the third quarter.
In its Global Auto Sales Monthly report, UBS said chip production has picked up and is expected to carry through into higher car production and sales before the end of the year.
“We think the time lag between raised output in the chip foundries and car production is currently up to 6 months,” the broker said.
“We expect a meaningful volume recovery to start in Q4 as current chip production run-rates are significantly higher than at the start of 2021.”
The UBS report said sales in North America, EU and Japan, the so-called triad markets, saw a strong hit from the chip shortage in July and that the third quarter is likely to be the low point in car sales and production.
In the top-5 western European countries, sales slumped by 27% from July 2020.