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More bad news for new car market as experts predict war in Ukraine is set to slash production even further

  • Experts warn that there are more bad times ahead for new car production
  • S&P Global Mobility predict war in Ukraine will result in five million fewer cars being built over next two years
  • Worst case scenario could see four million fewer cars per year in both 2022 and 2023

Time 10:24 am, March 17, 2022

Experts have warned that new car production is set to be slashed even further this year thanks to the war in Ukraine and an existing shortage of semiconductors.

S&P Global Mobility, which specialises in automotive data, has cut its forecasts for the next two years as a result of the current global issues.

It now predicts that 170.1m cars will be built worldwide across 2022 and 2023 – a drop of more than five million compared to previous forecasts.


That breaks down as 81.6m cars in 2022 and 88.5m cars in 2023 – both 2.5m fewer than previously thought.

The firm’s worst case scenario predicts that as many as four million cars per year could be wiped off production lines.

A report from S&P Global Mobility said: ‘With conflict in Ukraine comes more reminders of the fragility of the world’s automotive supply chains.

‘The downgrade decomposition will broadly comprise just under one million units from lost demand in Russia and Ukraine; and the remainder split between the worsening semiconductor supply issues, and the loss of Ukraine-sourced wiring harnesses and other components respectively.


‘In addition, the complete loss of Russian palladium is a tail risk with the potential to become the industry’s biggest supply constraint.’

How the automotive industry has reacted to Russia’s invasion of Ukraine

The change in forecasts is yet more bad news for new car dealers, with registrations already hitting historic lows thanks to supply chain issues.

The Russian invasion of Ukraine has already sent huge shockwaves around the industry, despite previous hopes of a recovery.

A number of manufacturers have been forced to close production plants due to difficulties in getting parts.

Volkswagen recently admitted that getting hold of wiring harnesses from its Ukrainian suppliers is now its biggest supply issue.

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To make matters worse, Ukraine’s two main suppliers of Neon for semiconductors have both ceased production due to the war.

The results have been huge waiting times for customers which are not set to improve any time soon.

Mark Fulthorpe, S&P Global Mobility executive director for global production forecasting, added: ‘The downside risk is enormous.’

Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.

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