Car production in Europe in trouble due to energy crisis

European car companies could face serious problems when it comes to increasing vehicle production in the coming months. This is described in a report published a few days ago by S&P Global Mobility. The still lasting supply crisis could join the predicted energy crisis to which the Old Continent could be subjected during the winter months.

According to the aforementioned S&P Global Mobility report, vehicle production could plummet by more than 1 million units per quarter from the end of 2022 (November) to mid-2023 (June). However, from the aforementioned agency they believe that these forecasts could be even worse in the event that the power cuts worsen during this period.

“The pressure on the automotive supply chain will be intense, especially as we seek to increase vehicle manufacturing,” said Edwin Pope, an analyst at S&P Global Mobility, in his speech with Automotive News Europe. To this he added that “factories may need to stop shipments of manufactured vehicles due to shortages of individual components”. This is because the restriction in certain terms on the use of energy could lead to a low production of elements (such as microchips, for example) and the consequent reduction in car manufacturing.

Currently, the different European governments are working to reduce the impact of the foreseeable energy crisis mainly due to setbacks with Russia, one of Europe’s largest gas suppliers. However, the measures proposed by some executives could be insufficient to avoid production stoppages during the winter. Among one of the terms to be implemented would be work schedules that generate greater energy efficiency.

2019 Opel Corsa-e
According to this report, vehicles manufactured in Spain could be among the most affected by the energy crisis

These conditions could cause production stoppages similar to those that occurred during the Covid-19 pandemic and the subsequent semiconductor crisis. According to the S&P report, the factories located in Europe would have a production of between 4 and 4.5 million vehicles per quarter. If energy restrictions intervene, production could fall to 2.8 million vehicles, which would mean a loss of between 4.8 and 6.8 million units per year.

This report analyzed 11 of the main production centers in Europe and positioned them according to their possibilities of bearing the risks against possible energy stoppages this coming winter. Among the countries with the highest ratings were Germany and the Czech Republic, which described a relatively low dependence on electricity derived from gas and its current reserves of this same material. On the contrary, the same report specifies that the countries that would be most at risk would be Spain, Italy, Belgium, due to their low “energy self-sufficiency”.

However, brands like Mercedes-Benz are already looking for an energy efficiency plan to avoid harmful results in their industry, as well as the consequent production shutdown in the coming months. In addition, this same brand continued to report strong profits during the past third quarter, despite the increase in prices and delays in car deliveries.

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