Posted on 29 Jul 2021
Global automotive production could rebound 7-9% on-year in 2021 but will be hampered by supply chain frictions, mainly the lack of semiconductors for OEMs, ING Bank says in a note sent to Kallanish.
The global semiconductor shortage has even affected next year’s production already, with 5 million vehicles estimated not produced in 2021 and 3m units in 2022, the bank says citing the Center for Automotive Research. The battle for chips will continue between the automotive industry, consumer electronics, computing and wireless communication.
Demand for vehicles however remains high despite the pandemic, with the current problems in the market being due to a supply shock. Order books are full, economic growth is rebounding and consumers are as confident as before the crisis. In the EU and eurozone, economic sentiment hit a 21-year high in June 2021, with the intention to buy a car within the next 12 months almost being back to pre-coronavirus levels, ING says.
“The EU’s ambitious ‘Fit for 55’ climate goals, which must still be ratified, do not represent an immediate risk to our production outlook as OEMs have been working on the electrification of their production targets for some time now,” the bank comments. “In addition to reliable infrastructure, demand for EVs is key and this has seen a significant surge in the EU over the last year.”
Sales of battery electric vehicles more than doubled between 2019 and 2020, while sales of plug-in hybrids more than trebled, resulting in over 1 million units in 2020. “If the current speed were to persist, all new registrations in the EU could be electrically powered by 2030,” the bank says. “Regardless of the speed, however, competition for batteries and electric components is set to heat up given the ever-growing need for entertainment technology, potentially leading to another round of supply shocks in the next couple of years.”
Uncertainty around a potential fourth wave of infections with variants spreading, unresolved supply issues, and rising prices pose a downside risk to ING’s global light vehicle sales growth forecast of 7-9% in 2021.
Source:Kallanish
