Russia’s invasion of Ukraine has prompted auto industry watchers to cut production and sales forecasts for the next two years. The crisis has forced factories in Eastern Europe to close and sent prices of already precious raw materials soaring.
Several factories in Ukraine have managed to continue operating amid the invasion. The workers are said to have taken time off work to escape the fire.
In March, S&P Global Mobility, formerly IHS Markit, cut its global auto output forecast to 2.6 million vehicles for both 2022 and 2023 because of the conflict. In the worst case, a total of 4 million vehicles are lost.
Europe’s car production is expected to fall by about 9% – about 1 million cars.
Part of that will be due to a direct drop in auto sales in Russia and Ukraine, but these countries together make up a small share of the global auto market – around 2% of the total by the end of the year. year 2021.
Of greater concern is raw material and parts shortages that are affecting European carmakers, and the report warns, could spread to other markets if the war continues.
Additionally, credit analysts at S&P Global Ratings also forecast that in 2022, global auto sales will fall 2% below 2021 levels. That’s a significant drop from a 4 percent increase. %-6% in sales for 2022 which the team last predicted in October 2021.
The report highlights disruptions to supplies of key auto parts from the region, perhaps most notably wire harnesses from Ukraine. At risk are also the raw materials – Russia produces about 40% of the world’s raw palladium – used to clean up vehicle exhaust. The region is also a producer of nickel, which is used in electric vehicle batteries. Even common minerals and metals, such as iron, are affected.
All of these are materials that are mainly used to make cars.
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