PARIS — Global automotive production appears to be gaining momentum, according to a new forecast from S&P Global Mobility — but the analyst company has downgraded its outlook for Europe as semiconductor shortages continue and slowing demand looms as an issue.
S&P Global Mobility (formerly IHS Markit) has upgraded its latest global forecast, issued this week, to annual growth of 5.7 percent compared with its mid-August forecast of growth of 5.1 percent, based largely on higher output in China as cities there emerge from coronavirus lockdowns.
Chinese production is expected to grow by 3.9 percent, Asia by 5.5 percent and the Americas by 11.7 percent.
But the outlook is different for Europe. For the year, Europe’s output is expected to fall by 0.5 percent, the only region expected to lose volume. As recently as last month, S&P Global was still forecasting modest annual growth for Europe.
Europe has been hit hard by semiconductor shortages, according to figures from Sam Fiorani of AutoForecastSolutions. For the year, Fiorani expects that the region’s factories will lose 1,442,377 units, or 35 percent, out of a total of 4,071,234 globally. In contrast, China, with a much bigger production footprint, is expected to lose just 244,327 units because of semiconductor issues.
The S&P Global forecast is used by many automakers and analysts as a strategic planning tool. Earlier in the year, the company was consistently downgrading its forecasts as the semiconductor shortage and the war in Ukraine continued to constrain production.
But starting in June, S&P Global began to upgrade its oulook for the year as supplies of components such as wire harnesses eased. September is the fourth month in a row it has upgraded the forecast.
Looking ahead, S&P Global expects global growth in 2023 of 5.3 percent, but that is down slightly from a previous forecast of 6 percent on risks of production disruptions and weakening demand in Europe and North America. European production is expected to increase by 12 percent.
“Key risks to global auto production seem to be slowly easing – if not yet normalized – as supply chains remain disrupted,” Morgan Stanley analysts wrote in a note to clients on Friday.
However, Morgan Stanley wrote, “The direction of travel looks better for Asia and worse for Western Europe.”
Source: https://europe.autonews.com/automakers/europe-auto-production-likely-drop-2022-sp-says