UK Car Lending

How car shortages are putting the global economy at risk

AIADA presented a story from the NY Times that worries us.

Unrest in the auto industry, a powerful engine of the global economy, threatens decline and wreaks havoc in businesses and communities that depend on auto companies for their money and jobs.

For every car or truck that does not come off an assembly line In the United States, Canada, China, Germany, Japan, South Korea, Mexico, Italy, France, United Kingdom , Australia, Spain, Russia, India, Brazil, Thailand and others, local jobs are threatened.

The auto industry accounts for about 3% of global economic output, and in manufacturing countries like Germany, Mexico, Japan or South Korea, or states like Michigan, the percentage is much higher. A slowdown in auto manufacturing can leave scars that take years to heal.

Automakers have been able to ease some of the spur by raising prices, passing some of the pain on to car buyers. The pain hits hard workers and anyone who needs an affordable car.

Automakers are allocating rare chips to high-end vehicles and the like that generate the most profit, resulting in long waits for cheaper vehicles.

Used car prices are skyrocketing due to the lack of new cars.

Read more here (Source: The New York Times).

Worsening shortages and high prices restrict manufacturing activity in the United States Manufacturing activity in the United States slowed in October, with all industries reporting record lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity at the start of the fourth quarter, according to reports
Reuters. The Institute for Supply Management (ISM) survey on Monday also hinted at some moderation in demand amid rising prices, with a measure of new orders falling to a 16-month low. Still, demand remains strong as retailer inventories continue to be depressed, which should keep manufacturing buzzing. “The stress in supply chains in the United States is not diminishing, resulting in a downside risk to our near-term GDP growth forecasts and a clear upside risk to the inflation forecast,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania. The auto industry has been hit hardest by a global semiconductor shortage. Transportation equipment manufacturers in the ISM survey said they had diverted chips “to our higher margin vehicles and stopped or limited production schedules for lower margin vehicles.”
Learn more here (Source:

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