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S&P Global Mobility’s May forecast has altered to an oil price scenario that assumes a more sustained impact through 2027, increasing pressure on vehicle demand, production costs, and supply chains. This is a modification from an earlier forecast from the respected consultancy that assumed the Iranian war and the Strait of Hormuz shut down would have only temporary negative effects on the global auto industry. [S&P Global Mobility is different from S&P Global Ratings, which is a separately managed division of S&P Global- AutoCrat.]*

“For May, S&P Global Mobility has shifted to an oil price scenario that assumes a more sustained impact through 2027, increasing pressure on vehicle demand, production costs, and supply chains. There is some early evidence that automakers are pulling forward select production as a hedge against potential feedstock and parts shortages, though existing inventories and limited alternative supply sources are helping cushion the immediate effect,” said Mike Wall, Executive Director, Automotive Analysis, S&P Global Mobility. “At the same time, region-specific challenges, especially weaker near-term demand in mainland China, are contributing to broader downward revisions across the short-term forecast horizon. The most meaningful cuts this month are concentrated in Greater China, Japan/Korea, and South Asia,” said Wall. Continue reading →