What Chip Shortage? Luxury Car Brands Had a Great 2021

Although sales of mainstream vehicles suffered last year amid supply-chain disruptions, some carmakers had a pretty good 2021.

As The Wall Street Journal reported Monday (Jan. 17), luxury brands such as BMW, Rolls-Royce and Porsche reported record sales last year, as wealthier consumers turned to car buying amid a pandemic that closed off other avenues of more extravagant spending.

“We are hardly affected by the chip shortage,” Alain Favey, sales chief at Bentley Motors Ltd., owned by Volkswagen, told the Journal.

“The process in the VW group is very centralized,” Favey said. “One of the elements to decide on allocation is the margin of profitability. From that perspective we are prioritized, so we managed to get all of the chips we needed.”

Bentley sold 14,659 cars last year, a company record and a 31% increase from 2020. Another VW brand, Porsche, sold 301,915 vehicles, an increase of 11%.

Meanwhile, production of actual Volkswagens struggled in 2021, as the ongoing chip shortage had the company scrapping shifts and working under capacity. That meant a drop in sales of 8.1% globally and 14.8% in China, VM’s largest signal market.

The Journal says this performance is in line with other mass-market car companies, which saw sales of models such as sedans and station wagons flag while SUV and electric vehicle sales made larger gains.

“Our target for 2022 is to more than double the sales of fully electric vehicles,” Pieter Nota, BMW’s sales chief, said in an interview with the Journal.

Nota said his company enjoyed a plentiful chip supply last year, and expects to get through this year thanks to new relationships with chip makers.

Read more: US Factory Production Drops as Auto Industry Struggles

Production at U.S. factories saw an unexpected drop late last year, caused in part by this decline in car-making.

As PYMNTS noted last week, manufacturing output dropped by 0.3% in December after a 0.6% increase the month before, accordion to Federal Reserve figures.

Supply chain constraints drove up the cost of used vehicles as well as new cars, which was one of the drivers for last month’s and this month’s historic inflation. Late last year, the vehicle valuation and research service Kelley Blue Book (KBB) reported that the average price of used cars had surpassed $27,000 for the first time.