Global Automotive Industry Woes Continue Despite Favorable 2022 Predictions

2020 was a year of serious change in many industries, with the automotive industry in particular being hit very hard. Demand for cars plummeted during the pandemic, and although it rebounded automotive manufacturers were unable to satisfy it due to the supply chain disruptions that were also caused. Semiconductors took precedence over automobiles, and the smoothing of that supply chain was predicted to bring a recovery to this industry because of the fact that this is the sort of thing that could potentially end up allowing them to fulfill demand after two years of struggle.

With all of that having been said and now out of the way, it is important to note that 2022 is not panning out in a way that anyone could have predicted. Despite strong initial sales during the year, Russia’s invasion of Ukraine put further strain on the already embattled supply chain by restricting access to vital raw materials that these two nations are an important source of, including nickel, lithium and cobalt all of which have gotten much more expensive due to the geopolitical turmoil in that region.

This along with various other factors are all forcing car companies to raise prices which is not ideal with all things having been considered and taken into account. Raising prices will ruin the steadily reparation of the demand flux that 2022 brought about, and government policies in numerous countries will make the 2022 recovery that so many people had hoped for even less likely to accomplish.

Most world governments are halting production, removing subsidies or reducing their manufacturing of electric vehicles. This has increased car prices from one to five thousand dollars, thereby making them out of reach for people that are still struggling to bounce back from the personal financial woes that the pandemic may have put them through. This just goes to show how fragile the state of our global economy is. The pandemic is likely going to have a very long lasting effect that would take at least a decade to sort itself out, and escalating global conflicts are making matters even worse.

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