Auto production is rebounding in North America, reported S&P Global Mobility, who reported it expects production of about 14.7 million cars and trucks this year in North America, an increase of 12.5% vs. 2021.
However, the analysts reported the rebound is not enough to reverse the trend toward record high prices because of high-demand and low inventories.
“The important thing to put that in context, is just how bad things got in 2021,” Mark Fulthorpe, executive director, Global Production Forecasting told Forbes. By comparison, 2022 looks pretty good.
Production fell with COVID-19 related factory shutdowns in 2020. It then took longer than expected to ramp up auto factories again once shutdowns ended.
North American automakers produced about 16.3 million vehicles in 2019. But S&P global reports product stayed flat in 2021 vs. 2020, at about 13 million cars and trucks.
For the first quarter of 2021, it appeared auto sales and production in North America would hit pre-pandemic levels. But a global shortage of computer chips used to control modern automotive electronics slowed production again.
The shortage worsened over the year as things like a fire at a chip manufacturing plant in Japan, ice storms in Texas, and pandemic-related shutdowns in Malaysia clipped chip manufacturing capacity.
Still, S&P Global Mobility expects worldwide production of about 80.4 million cars and trucks in 2022, up about 4.1% vs. 2021.
Automakers have increased production by limiting features and options that employ chips. Some automakers now produce vehicles without certain chips, promising to installer them later.