Eurofer revises down automotive outlook, 2023 rebound possible

EU automotive sector output should rebound by 1.1% on-year in 2023, following a projected 1.7% drop this year, provided that war-related disruptions and economic uncertainty ease substantially, says Eurofer. The 2022 forecast has been revised down from the previous 0.5% contraction due to ongoing supply chain disruptions and the war in Ukraine.

Automotive output returned to growth, albeit modest, in the second quarter, following three consecutive quarters of decline due to severe supply chain issues. Output nevertheless remains well below both pre-pandemic and pre-2019 recession levels, Eurofer points out.

Supply chain issues and war-related disruptions, coupled with low consumer confidence and squeezed incomes due to high inflation, have kept on weighing on vehicle output.

The latest monthly passenger car registrations data show that in August and September passenger car registrations reversed their downward trend in the EU. This increase, however, is largely due to the comparison with the very low figures of September 2021, when the semiconductor shortage seriously hindered vehicle production.

Demand is expected to remain weak until the macroeconomic picture and consumer disposable income substantially improve – “which has become now less likely given the worsening economic outlook and more subdued economic growth perspectives”, Eurofer says in a report seen by Kallanish.

Adam Smith Poland