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    The automotive market with further problems – what can we expect soon?

    The last few years have not been good for the automotive market. According to autobaza.pl, the number of used cars offered in 2021 decreased by 15% compared to the pre-pandemic year 2019. The crisis that began with the pandemic is still ongoing. A marked improvement in the situation was predicted earlier this year, but the Russian attack on Ukraine has drastically revised previous forecasts. One thing is certain: the year 2022 will bring with it several new problems and associated changes in the automotive market.

    Uncertain times

     

    Since Russia’s invasion of Ukraine, the prices of metals used in automobile production have risen significantly – from aluminium in the body, palladium in catalysts to nickel in batteries. The war has also hindered the supply of extremely important cable harnesses, which are indispensable for the construction of automobiles. Ukraine is its main supplier, which has already led to the suspension of production in several European plants. According to AlixPartners and Comtrade, almost 7% of all wires imported into the European Union come from Ukraine.

     

    Ukraine also plays a key role in the production of gases needed for the production of semiconductors, such as krypton, argon, xenon and, above all, neon, where 70% of the world’s neon production comes from. It is worth mentioning that after the annexation of Crimea in 2014, neon prices have increased sevenfold.

     

    “The effects of Russian aggression are getting stronger – fuel prices are rising. Currently, we see prices per litre of more than 7 zloty at gas stations. What is important is that the situation is constantly changing and highly unpredictable. The war in Ukraine prolonged the uncertainty in the market, which had slowly recovered from the pandemic. At this point, no one can predict how and when the situation will improve for a longer period,” says Marek Trofimiuk, an expert at autobaza.pl.

     

    The situation on the other side of the eastern border has a rapid impact on the market. Brands such as Volkswagen, ŠKODA, Porsche, Audi, BMW or Mini have to struggle with the lack of parts of the Ukrainian manufacturers and stop or partially restrict their work.

     

    Well-known problems

     

    Apart from the immediate effects of the war, the automotive market in Poland in 2022 may be affected by many factors, including rising inflation, supply problems and tax changes. In addition, the sectors expect significant price increases for cars and stabilisation of sales, the introduction of new products in the vehicle financing market and a decrease in the share of conventional leasing and an increase in the electric cars market. Problems also persist in the supply of microprocessors, the availability of magnesium and supply chain disruptions which have led to problems in the accessibility of vehicles in recent years.

     

    The price increases are mainly due to the global restraint in car production – the impact will be even more pronounced after the closure of the factories in Russia. In Europe, the tightening of EU emission standards and the obligation to equip vehicles with automatic safety systems are additional prices for drivers.

     

    “The situation on the used car market still seems to be stable, although something will certainly change. Polish dealers who exported cars or parts to Ukraine lost one of the increasingly attractive markets. Shortly, the interest of Poles in car purchases will also be interesting because of such a close conflict and potential economic problems,” summarizes Marek Trofimiuk, expert of autobaza.pl.

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