Column: Cheers to a more normal new year in the auto industry

I’ve never liked the term “new normal”. What is “normal” is always changing, ever-new, like a new model year

But sometimes we see a more tectonic shift: the $5 day. Flint sit-down strike. chicken tax Nader. replacement Tesla. COVID-19.

We are not done with Covid, but it has become an immediate threat, personally or economically – at least in the West. China is another story.

We haven’t solved the chip shortage either, but like Covid, it’s becoming a less acute pain point. After more than 10 million light vehicles were lost to production due to semiconductor shortages in 2021, less than half that many were lost in 2022, according to AutoForecast Solutions.

Looking back, though, this recovery year was not what I expected. Russia’s aggression in Ukraine took its toll on European manufacturing, which remains a significant part of the globally integrated auto industry.

And even though production constraints put the industry into something of a recession, the Federal Reserve suddenly decided that high inflation was more systemic than transitory and began raising interest rates. This has hit the brakes on demand for full-size pickups, which is highly correlated with new housing starts, as well as affordability of still-scarce used vehicles.

While Covid has been an unusually profitable time for automakers and retailers, it has been a particularly trying time for suppliers, struggling with inconsistent and unpredictable production schedules as well as overall depressed output. The coming year may bring back more normalcy in terms of factory output and vehicles sold at or below stickers.

Another sign of a return to normalcy is the office-to-office-ish practice that General Motors, among others, is looking to restore.

But it’s a changing industry we’re coming back to: more digital retail, more EVs.

The EV market has been reshaped by Sen. Joe Manchin’s terms on taxpayer support. Battery and electric vehicle assembly plants are going up all over North America. And the new year will bring a new system for allocating credits to eligible buyers of zero-emission vehicles … finally, just not on January 1.

The new year will bring the end of the UAW’s historic, though hitherto little-used, right to directly elect officers. The Detroit 3 will negotiate in 2023 not only with a UAW that isn’t ready to fight back, but also with Canada’s Unifor, which has new leadership after a scandal of its own.

Is this normal”? At least the year will be new.

FOR MORE VISIT : www.autonews.com

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