Russia’s invasion of Ukraine presents a “substantial risk” to the recovery of global light-vehicle sales this year, auto industry consultants J.D. Power and LMC Automotive said in a joint forecast on Friday.
The consultants cut their forecast for global light-vehicle sales by 400,000 to 85.8 million units, also due to rising oil and aluminum prices that could discourage buyers from spending on new cars and trucks.
The supply and prices of vehicles across the globe will be under added pressure based on the severity and duration of the conflict in Ukraine, said Jeff Schuster, president of Americas operations and global vehicle forecasts, at LMC Automotive.
Russia’s attack on Ukraine caused oil prices to surge to more than $100 a barrel for the first time since 2014 on Thursday, with Brent touching $105.
The auto industry is still grappling with a global chip shortage that has forced them to cut back production, although high car prices have offset that impact to an extent.
February U.S. retail sales of new vehicles are expected to fall 5.7% to 922,100 units, although average transaction prices are set to hit a monthly record of $44,460, an 18.5% jump.
“Ongoing supply chain disruptions, along with near-term announcements of production outages by several manufacturers, mean that the aggregate inventory situation is unlikely to change in March,” said Thomas King, president of the data and analytics division at J.D. Power.
However, the volume of global light-vehicle sales is expected to rise 5% in 2022, according to the report.
(Reporting by Nilanjana Basu in Bengaluru; Editing by Amy Caren Daniel)