Research firm S&P Global Mobility, formerly known as IHS Markit, has lowered its estimate for car production For the years 2022 and 2023, it increased by 2.6 million cars, which indicates an expected decline in production by about 5 million cars during the two years from 2021 production levels, due to the Russian-Ukrainian war.
The market research company expects car companies to produce 81.6 million cars worldwide this year and 88.5 million next year, according to Bloomberg, which was reviewed by Al Arabiya.net.
“The downside risks are enormous, and in the industry’s worst case scenario, production will be 4 million vehicles less than the previous forecast for each year,” said Mark Folthorpe, executive director of global production forecasts for S&P Global Mobility.
S&P Global Mobility cites the impact the Russian war is having on energy and raw materials prices, predicting a worsening semiconductor shortage and disruption of wire flow from Ukraine.
Suppliers could have problems getting chip-making neon from Ukraine, as well as palladium from Russia, a platinum-group metal key in catalytic converters, which turns engine exhaust into less toxic emissions.
The outbreak of COVID-19 cases in China is also closing factories in major manufacturing centers in Shenzhen, such as Toyota, Volkswagen, Changchun and Tesla.