July 2022 Light Vehicle Production Forecast update
The following reflects the S&P Global Mobility July
2022 Light Vehicle Production Forecast update:
The July 2022 light vehicle production forecast update reflects
the mixed effects of recovering Greater China and South Asia
markets offset somewhat by lingering supply chain pressures in
other regions. We remain mindful of deteriorating economic
conditions. However, the auto industry is already operating at, or
near, recessionary levels influenced by supply chain challenges,
the Russia/Ukraine conflict and ongoing COVID dynamics, among other
influences.
Economic headwinds are expected to prove more impactful and
contribute to demand destruction in 2024 and beyond even as supply
imbalances are reduced. It will be important to keep a watchful eye
on inventory levels as the transition from supply constrained to
demand driven (and demand that is ultimately vulnerable to macro
pressures) could be rapid and vary from market to market.
This month’s forecast update reflects a near-term increase for
Greater China due to stronger demand with COVID lockdowns expiring
and stimulus taking effect as well as a stronger near-term outlook
for South Asia. Conversely, lingering supply chain impacts from the
recent lockdowns in China result in downward revisions for Japan
and general supply chain pressures continue to impact the near-term
outlook for Europe and South America. Further, there remains a
heightened focus on demand and production in 2024 and beyond as
markets shift from supply constrained to demand influenced in the
face of deteriorating economic fundamentals.
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.
