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Sunday, February 5, 2023
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Vehicle production unlikely to rebound in 2023

Semiconductor issues will hamper output well into 2023 and probably into 2024.

Global production losses in 2021 topped 10 million units, improving to about 3.5 million units in 2022. The competing forces of supply chain issues and lowered expectations will find chip-based losses falling below two million units – a sizable improvement, but not the 60% improvement last year. Recent announcements from Toyota and Volkswagen, among others, show the issue has yet to be resolved fully.

Inventory levels in North America are rising. In the last four months of 2022, the stock of pre-sold vehicles grew 40% as steadier supplies of parts and the growing fear of a recession took hold. Stock of new vehicles has not been this high in the past 18 months, but it remains well below pre-chip shortage levels.

This story is an extract from the January 2023 issue of Auto Forecast Solutions’ monthly report. Auto Forecast Solutions is the only fully integrated solutions provider of vehicle, powertrain, drivetrain and electrification production forecasting, business planning software and advisory services to the global automotive industry. Click here to download the full report, or to catch up on previous months.

Production in 2023 will grow by 4.9% – still below pre-pandemic levels and way below the trend that peaked in 2017 at over 95.6 million units of global light vehicle production. As the global industry recovers, returning to those levels will not happen before 2028 as the market slowly heads toward the glass ceiling of 100 million units, which will be broken in 2033.

Asia-Pacific powers the global market, with 55.8% of the world’s vehicle output in 2023. A recovery in China is necessary to propel this region forward because it makes up by far the largest share. Japan, India and South Korea are also struggling to grow. With China getting back to record levels over the next few years, growth will level off while the country will make its transition from supplying the domestic market to becoming an export hub.

Sam Fiorani

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