A closely watched auto industry forecaster has lost more than 5 million cars over projected global production this year and next, largely due to the projected fallout. from Russia’s invasion of Ukraine.
S&P Global Mobility, formerly known as IHS Markit, lowered its 2022 and 2023 estimates by 2.6 million vehicles each year. Forecasters now expect auto companies to produce 81.6 million cars worldwide this year and 88.5 million next year.
“The downside risk is huge,” said Mark Fulthorpe, managing director of global manufacturing forecasting at S&P Global Mobility. In the company’s worst-case scenario, production will be 4 million vehicles lower than previously expected for each year.
S&P Global Mobility cites the impact that Russia’s war has on prices of energy and raw materials, expectations of semiconductor shortages are getting worse and interruption of harness product line from Ukraine. Suppliers may have problems sourcing neon gas used to make chips from Ukraine, as well as palladium from Russia. Platinum group metals are the basis of catalytic converters, turning engine exhaust into less harmful emissions.
China’s outbreak of Covid-19 cases has also led to factory closures in manufacturing hubs including Shenzhen and Changchun. Toyota Motor Corp.Volkswagen AG and Tesla Inc. is one of a number of companies that have shut down factories this week.
