According to a new report published by S&P Global Mobility, car production in EUROPE is expected to plummet by “millions of units”.
The analytics firm says the ongoing energy crisis – a by-product of the Russia-Ukraine conflict – and continued component shortages could lead to production shutdowns as soon as the final quarter of this year. and continue through 2023.
S&P said parts shortages and supply bottlenecks are “likely to hit automakers the hardest between November and spring 2023,” especially if energy is cut in the coming months. winter is colder.
“The pressure on the auto supply chain will be enormous, especially as more businesses move upstream from the vehicle manufacturing sector,” said S&P Global Mobility analyst Edwin Pope.
Governments across Europe are intervening to reduce the impact of the energy crisis on industry, but analysts warn that the measures may not be enough to protect umbrella producers from shutting down production during the winter.
S&P warned that just-in-time models will also face problems as some suppliers implement more energy-efficient shift schedules. It warned that further parts shortages and bottlenecks could trigger production shutdowns similar to what happened during the COVID-19 pandemic and Russia’s invasion of Ukraine.
S&P has forecast that car factories in Europe will produce up to 4.5 million units per quarter over the next 12 months if the energy crisis is not intervened. That number was later reduced to 2.8 million units per quarter, which would mean a loss of 6.8 million vehicles per year.
The S&P forecast looked at 11 major auto manufacturing hubs across Europe and ranked them according to which countries are best positioned to endure the expected energy crisis.
The news came just a few months later Industry analysts warn of a ‘perfect storm’ in vehicle manufacturing due to soaring inflation and interest rates, high raw material and energy costs, and lingering effects from the COVID-19 pandemic, including the much-publicized microprocessor shortage.
Focusing mainly on manufacturing activity in the European Union, economic analysts warn that falling incomes and falling output will be further affected by uncertainties surrounding energy security in the region.
The news means that customers could face lengthy wait times to get their vehicle or accept unspecified equipment options to pick up their vehicle on time.
It’s a scenario that has repeated itself throughout the duration of the COVID-19 pandemic, and one that seems far from over.
The most recent is this week Toyota Australia says it is still suffering from production problems with models including GR86, LandCruiser and RAV4 causing customers to spend a long time waiting.
Customers who have questions around the appearance of their vehicle are advised to contact their local dealer or preferred dealer directly.
With Bloomberg
