Revealing the reasons why 2566 may be another difficult year. “Automotive industry”?

CNBC news agency reported on December 28, 2565 that interest rates are high. supply chain problems and fear of economic recession It is one of the key challenges for the global automotive industry in 2565, and those issues are not expected to be resolved quickly. There is growing concern on Wall Street that this year's capacity shortage could become a situation. Rapid “demand destruction” just as car production is finally ramping up

Bernstein analyst Daniel Roeska wrote in an investor note in early December that “There has been a significant reduction in demand in the industry. Considering the rate of inflation interest rate and energy costs But so far this has mostly affected jobs.”

As automobile production increases Bernstein analysts say the market in early 2566 will need to understand where, when and to what extent automakers will feel the pain.

With auto sales continuing to increase, most analysts expect global and U.S. auto sales to increase in 2566, unlike traditional downturns or past periods of weak demand. That's largely because auto sales have been at or near recession in the U.S. and other parts of the world since the start of the COVID-19 outbreak in early 2563, when the pandemic disrupted production and supply chains. Around the world causing car manufacturers to reduce production A shortage of new cars, trucks and SUVs means automakers and dealers demand and receive much higher prices for the vehicles they can deliver.

Jonathan, Smoke, chief economist at Cox Automotive, said in a recent video that “Finally, new car production capacity has improved. But the industry is replacing the capacity problem with a demand problem. This is not a good sign for revenue and profits next year.”

Cox Automotive forecasts U.S. new vehicle sales of 14.1 million vehicles in 2566. Charlie Chesbrough, senior economist and senior director of industry insights at Cox, expects U.S. auto sales in 13.7 This will be 15.1 million vehicles. U.S. sales are 2564 million vehicles in 14.6 and 2563 million vehicles in XNUMX.

S&P Global Mobility expects global new vehicle sales to reach nearly 83.6 million vehicles in 2566, up 5.6% from a year earlier. in the united states The data and consulting firm expects sales to increase 7% to about 14.8 million vehicles in 2566.

Additionally, Chesbrough noted that the expected increase is due to the large number of low-income and subprime borrowers. They typically exit new vehicle segments during recessions. It has done so due to low inventory and record high prices.

Chris Hopson, North American light vehicle sales forecasting manager for S&P Global Mobility, said in a statement: “Continued supply chain challenges and recession fears will result in a cautious market recovery. US consumers are in decline. And a recovery to pre-pandemic auto demand levels feels like a hard sell. Inventory and incentive activities will be key barometers for measuring demand destruction potential.”

In other words higher interest rates Fears of a growing recession and excessive inventory levels Will it force automakers to lower prices and give up profits to attract potential buyers to showrooms?

Reference: https://www.cnbc.com/2022/12/27/why-2023-could-be-another-difficult-year-for-the-auto-industry.html