EUROFER: Negative factors faced by EU auto sector to persist until Q2 2023

Thursday, 27 October 2022 17:37:07 (GMT+3)   |   Istanbul
       

According to the Economic and Steel Market Outlook 2022-2023/Q4 2022 Report from the Economic Committee of the European Steel Association (EUROFER), automotive output in the EU increased by 1.4 percent year on year in the second quarter, after dropping for three consecutive quarters. Despite the increase recorded in the second quarter, output in the sector remains well below both the pre-pandemic levels and the pre-2019 recession levels.

Ongoing disruptions on the supply side, in particular the shortage of semiconductors chips, as well as hikes in energy prices and soaring shipping costs, continued to significantly affect the automotive industry. This situation also contributed to continued depressed demand.

According to the latest monthly passenger car registrations data, in September passenger car registrations in the EU rose by 9.6 percent year on year. This increase, however, was largely due to the comparison with the very low figures of September 2021, when the semiconductor shortage seriously hindered vehicle production.

The automotive output in the EU is expected to drop by 1.7 percent in 2022, due to the ongoing supply chain disruptions and the effects of the war between Russia and Ukraine. These downside factors are expected to persist throughout 2022 and at least until the second quarter of 2023. As for 2023, EUROFER expects automotive output in the EU to rebound by 1.1 percent, provided that war-related disruptions and uncertainty will ease substantially.


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