(Bloomberg Opinion) — An auto industry forecast cut more than 5 million cars from its projections for global production this year and next, largely because of the expected fallout from Russia’s invasion of Ukraine.
S&P Global Mobility, formerly known as IHS Markit, lowered its estimates for 2022 and 2023 and 2.6 million vehicles around a year. The forecaster now expects auto companies to produce 81.6 million cars globally this year and 88.5 million in 2023.
“The downside risk is estreen,” said Mark Fulthorpe, project manager for global manufacturing at S&P Global Mobility, contacting them. In the company’s worst-case scenario, production runs up to 4 million vehicles below its previous projections for each year.
S&P Global Mobility mainly cites the effect Russia’s war is having on energy and commodity prices, as expectations for semiconductor shortages worsen. Additionally, the testers could have problems with the supply of neon gas from Ukraine used for the manufacture of chips, as well as palladium from Russia. Platinum group metal has an elemental base of catalytic converters, which allows engine exhaust to emit less toxic emissions.
The spread of covid-19 cases in China is also another factor affecting the nature of manufacturing plants, including those in Shenzhen and Changchun. Toyota Motor Corp., Volkswagen AG and Tesla Inc. are among the companies with factories coming online during this period.
Auto manufacturing forecast cut by more than 3% by 2022 due to war, chip supply
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