Russia's invasion of Ukraine has led observers in the automotive industry to reduce production and sales forecasts over the next two years. The crisis has shut down factories in Eastern Europe, and has led to an increase in the price of already valuable raw materials.
In March, S&P Global Mobility, formerly known as IHS Markit, reduced its projectile for global car production by 2.6 million vehicles both in 2022 and 2023 as a result of the collision. The worst case scenario has reached 4 million lost vehicles.
European car production is expected to decline by about 9% - about 1 million cars.
Some of it will be due to the loss of car sales in Russia and Ukraine, but those combined countries make up a small portion of the global car market - about 2% of the total by 2021.
The main concern is the shortage of items and parts that are already hitting European car manufacturers and, the report warned, could spread to other markets if the war continues.
Separately, debt analysts at S&P Global Ratings also predict that by 2022 global car sales will fall by 2% below 2021 levels. That’s a significant decrease from a 4% -6% increase in 2022 sales the group last predicted in October 2021.
The report highlighted the disruption in the supply of essential car parts to the region, perhaps mainly from Ukrainian harnesses. At risk with raw materials - Russia produces about 40% of the world's green palladium - used to purify automotive gas. The region also produces nickel, which is used in batteries for electric vehicles. Even common metals and metals, such as iron, are affected.