Q4 2023 North America & Europe Auto Industry Report: Demand, Supply and Evolving Risks

February 14, 2024

Our Q4 2023 report centered on three key themes: Demand, Supply, and Evolving Industry Risks.

Regarding demand, our analysis focused on Consumer Finances & Vehicle Affordability, the US EV Market, and the European EV Market. Significant shifts have been observed in the automotive sector, with vehicles becoming more affordable compared to the previous year. Original Equipment Manufacturers (OEMs) are exploring lower-cost vehicle options and showing increased interest in hybrid models. Additionally, vehicle inventories have been replenished. However, certain factors remain unchanged; unemployment rates remain low, interest rates are elevated compared to the past decade, and wages continue to rise.

In terms of supply, our study covered NA Launches & Delays, among other aspects. In response to UAW Detroit 3 contracts, OEMs have raised wages for workers, coinciding with efforts by the UAW to organize at additional factories. Meanwhile, lithium prices have decreased significantly while ocean freight costs have risen. Persistent challenges include costly launch delays as North American production scales up, and concerns persist over the availability of skilled labor, impacting both OEMs and suppliers. Effective cost reduction remains a top priority.

Lastly, our report addressed Tariffs & Chinese Competition and Red Sea & Logistics. Chinese automakers have intensified their global distribution efforts, targeting Europe and Mexico in particular. Hostilities in the Middle East have disrupted trade routes through the Suez Canal. Ongoing concerns involve the Russia-Ukraine conflict, which continues to affect energy and raw material markets. Strategies such as re-shoring and robust risk management are pivotal in shaping supply chain decisions.

We look forward to providing deeper insights on these topics in our upcoming reports and welcome further discussions on these developments.

Seraph is pleased to share the webinar of our quarterly industry report—an insightful discussion about the prevailing trends shaping the automotive sector. During this webinar, Seraph’s Presidents for North America and Europe will provide an outline of the report, accompanied by engaging interactions with fellow leaders who participated in the discussion.

 

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