No one is sure which way the industry will blow next year.
As 2022 comes to a close, automotive industry analysts are preparing their predictions for 2023, and at the moment, things could go either way. Some analysts are choosing to remain optimistic that the post-pandemic demand for cars, trucks, and other forms of transport will light a fire under auto sales, while others have pointed out that there are still many issues plaguing both the automotive industry and the global economy that need to be dealt with.
“There is active demand destruction in the industry, given inflation, interest rates, and energy costs − but so far, this has mostly impacted the backlog,” Bernstein analyst Daniel Roeska said in a note to investors obtained by CNBC.
Automotive manufacturers are only just building back from the pandemic-era slump and the major decrease in travel it brought with it. Even if they do resume production, though, many car retailers and dealerships still have an unsold backlog of vehicles to work through.
“New vehicle supply is finally improving but the industry is swapping a supply problem with a demand problem and that doesn’t bode well for revenues and profits in the year ahead,” said Cox chief economist Jonathan Smoke.
Why 2023 could be another difficult year for the auto industry https://t.co/cC2xO762Tj
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“Ongoing supply chain challenges and recessionary fears will result in a cautious build-back for the market. US consumers are hunkering down, and recovery towards pre-pandemic vehicle demand levels feels like a hard sell. Inventory and incentive activity will be key barometers to gauge potential demand destruction,” said Chris Hopson, manager of North American light vehicle sales forecast at S&P Global Mobility.