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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.
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