«2023? A year in which prospects remain good, there are still ample margins for builders. As for suppliers, they should benefit from the indexation of their pricing to raw materials, recovering the ground lost in 2022 due to inflation. We don’t expect major rating transitions. With an eye to 2024, because if the theme of high rates is confirmed, without the carry-over effect of orders we will see the return of a pure game of supply and demand. Everything will be weighed down by the uncertainty caused by geopolitical tensions».
Vittoria Ferraris, sector lead Automotive Emea of S&P Global Ratings, thus outlines the current year of the car, looking to the next. The first quarter accounts confirmed a good general state of health, the legacy of an exceptional 2022. The main houses have confirmed their forecasts for 2023, even if there are elements of concern.
Inflation and monetary policies: demand falters
The level of sales was stable year-over-year globally in the first quarter (but will not return to pre-pandemic levels before 2025). Yet according to the report “Global Auto Sales Forecasts: Macro Risks Demand Pricing And Production Disciplineby S&P Global Ratings, the recent uptrend in demand may falter, especially in North America and Europe. Inflation is still here and the tidal wave of monetary policy tightening could unfold its negative effects on consumers’ purchasing power in the second half of 2023.
The expected slowdown on central bank rates «may also come – continues Ferraris – but the transmission of the rising phase to the economy will in any case be felt in the second half of the year. It all stems from the fact that the Fed’s intervention came later than what operators would have hoped to keep prices under control. This then led to a maneuver that went even further than it could have been. The same can be said of the ECB. So there will definitely be an effect of mismatch, which may be even more evident in Europe. Here, let it be clear, some producers have a very high order book, which will lead them to arrive without problems until the end of the semester. In the second, however, we will see what the real fundamentals of demand are».
New orders, signs of weakening in Europe
In fact, signs of weakening new orders have already been seen in Europe since the beginning of 2023. At the same time, second-hand prices remain at their highest (+10% in the EU in 2023) despite the normalization of supply chains , which in the previous two years had extended the delivery times of the new well over 12 months. The explanation could be that the price lists still too distant from the portfolios and the tightened financing conditions shift part of the demand towards the second-hand market. The slowdown in sales may be more evident from the second half of 2023 and into 2024. Possibly exacerbated by a weakening labor market.