Semiconductor availability, regional demand headwinds
at odds in global production picture
The global auto industry continues to be influenced by near-term
challenges of navigating ongoing supply chain pressures coupled
with economic headwinds and intermediate-to-longer term dynamics
involving a structural shift from internal combustion to electric
propulsion. While semiconductor availability continues to improve,
having the right chip for the right vehicle at the right plant can
still prove elusive and impact the ability to accelerate
Further, in several markets, we continue to adjust for macro
deterioration contributing to demand destruction. In the longer
term, vehicle pricing will be a key consideration and a potential
headwind to demand, particularly as many markets shift to much
higher levels of electrification.
The September 2022 forecast update reflects a near-term upgrade
for Greater China due to stronger demand post-COVID lockdowns and
robust stimulus effects as well as a stronger near-term outlook for
South Asia and Middle East/Africa. However, equally important are
the near-to-intermediate term downward revisions particularly
focused on Europe and North America, among other regions.
In the extreme near-term, semiconductor availability remains a
key factor in the ability to accelerate production growth. Further,
we continue to see demand destruction pulling ahead into 2023 for
key markets which has direct implications to production and impacts
the magnitude/need for inventory restocking.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.