Russia-Ukraine conflict will result in five million fewer cars being built over next two years, market data provider reports
© Getty Images / Peter Dazeley
Auto market data provider S&P Global Mobility said on Wednesday that the shortages hampering global vehicle production are expected to persist into 2022 before supply catches up with demand in early 2023. The agency has downgraded its outlook for world light-vehicle output by 2.6 million units for both years, to 81.6 million for 2022 and 88.5 million units for 2023.
S&P experts cited issues relating to the supply of Ukrainian neon gas, a key ingredient for chip making, and to the loss of Ukraine-sourced wiring harnesses. “In addition, the complete loss of Russian palladium is a tail risk with the potential to become the industry’s biggest supply constraint,” the report said.
Ukraine parts shortage shuts down European car plants
“Our worst-case contingency shows possible reductions up to four million units for this and next year,” S&P Global Mobility’s executive director for global production forecasting Mark Fulthorpe said.
The Ukraine crisis has added to the pains suffered by automakers, who had been grappling with high prices due to Covid-related disruptions, including semiconductor shortages. This week major car manufacturers announced they will shut down plants and raise prices further as supply issues mount.
For more stories on economy & finance visit RT’s business section