Not even a perfectly crafted April Fools Day ruse could convince any of you that the global supply chain has returned to normality, with shipping issues and parts shortages wreaking havoc across many of the world's major industries.
One industry, in particular, that's been beaten down by supply chain woes has been auto manufacturing.
End-of-quarter reports have begun to emerge from analysts and it's not looking great for automakers. Sharp sales declines are expected, with U.S. sales expected to dip by over 14% compared to the year-ago quarter. This number could be even higher for individual manufacturers, with companies such as GM and Volkswagen anticipating a drop in excess of 20%.
Inflation has played its part, and so too has the rising price of fuel sparked by the ongoing Russian invasion of Ukraine. But, chief amongst the causes is the continued global supply chain carnage -- in particular the shortage of semiconductor chips.
Both Ford and GM separately announced forced production stoppages at major plants in Michigan this week due to an unassailable lack of parts. This marks the second manufacturing shut down for GM in as many weeks, while Ford previously ceased production at its Kansas City plant for a week only last month.
Lagging production, spiraling costs, and consumer hesitance has seen many major auto stocks fare poorly this year. Ford is down 22%, GM is down, 28%, even Tesla -- a stock that has so often defied conventional industry logic -- is down 10% for the year so far.
The industry desperately needs a break that just doesn't seem to be coming. COVID-related supply issues still remain, and any respite that seemed to be occurring has now been flattened by the conflict in Europe. Cars will always be needed, but for now, some short-term suffering is unfortunately unavoidable.
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