PARIS — Global auto production appears to be picking up steam, according to a new forecast from S&P Global Mobility — but the analyst firm has downgraded its outlook for Europe as semiconductor shortages continue and that slowing demand is looming as a problem.
S&P Global Mobility (formerly IHS Markit) updated its latest global forecast, released this week, to 5.7% annual growth from its mid-August growth forecast of 5.1%, based on much on higher output in China as cities emerge from coronavirus lockdowns.
Chinese production is expected to grow by 3.9%, Asia by 5.5% and the Americas by 11.7%.
But the outlook is different for Europe. For the year, European production is expected to fall by 0.5%, 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 factories in the region to shed 1,442,377 units, or 35%, out of a total of 4,071,234 worldwide. By contrast, China, with a much larger production footprint, is only expected to lose 244,327 units due to semiconductor issues.
S&P Global forecasts are used by many automakers and analysts as a strategic planning tool. Earlier in the year, the company steadily lowered its forecast as semiconductor shortages and the war in Ukraine continued to limit production.
But from June, S&P Global began to improve its outlook for the year as supplies of components such as wire harnesses eased. September is the fourth month in a row that it has updated the forecast.
Looking ahead, S&P Global expects global growth of 5.3% in 2023, but this is slightly lower than a previous forecast of 6% due to risks from production disruptions and weaker demand. in Europe and North America. European production is expected to increase by 12%.
“Key risks to global auto production appear to be slowly easing – if not yet normalized – as supply chains remain disrupted,” Morgan Stanley analysts wrote in a note to journalists on Friday. clients.
However, Morgan Stanley wrote, “The direction of travel looks better for Asia and worse for Western Europe.”