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Russia’s invasion of Ukraine may pressure light-vehicle sales growth

by Mike Robinson

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© Reuters. FILEPHOTO – The Ford booth is visible at the North American International Auto Show Detroit (Michigan, U.S.A), 10 January 2017. REUTERS/Brendan McDermid

(Reuters) – The Russian invasion of Ukraine is a substantial risk for the global recovery of light-vehicle exports this year according to J.D. Automotive consultants. In a Friday forecast, Power and LMC Automotive stated that they were in agreement.

Consultants reduced their projection for global light vehicle sales by 400,000 units to 85.8million units. This was also due to higher oil and aluminum prices, which could deter buyers from buying new cars or trucks.

According to Jeff Schuster (president of Americas operations at LMC Automotive) the impact of the Ukraine conflict on vehicle supply and price will put additional pressure on global vehicles.

Russia attacked Ukraine, causing oil prices to soar to $100 per barrel. Prices reached $105, the highest level since 2014.

The global shortage of chips is still a problem for the auto industry. However, high prices have helped to offset this impact.

U.S. Retail Sales of New Vehicles in February are likely to decline 5.7% to 922 100 units. But, average transaction prices will reach a record monthly of $44,460. That’s an 18.5% rise.

Thomas King, President of J.D.’s data and analytics division, stated that “ongoing supply chain disruptions along with near-term production outages announcements by many manufacturers mean that the aggregate inventories situation is unlikely to change” in March. Power.

The report states that the global volume of light-vehicles sales will rise by 5% through 2022.

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