I never liked the term “new normal”. “Normal” is always changing and always new, like a new year.
But occasionally we see more tectonic movements. It’s a $5 day. Flint’s sit-in strike. chicken tax. Nader. Transplant. Tesla. COVID-19 (new coronavirus infectious disease.
We’re not done with COVID, but it’s no longer an immediate personal or financial threat – at least in the West. China is another story.
The tipping shortage is still there, but like COVID, it’s becoming less of a problem. According to AutoForecast Solutions, in 2021 he will lose more than 10 million light vehicles to semiconductor shortages, but in 2022 he will lose less than half that number.
But looking back, this year was not the year of recovery I expected. Russia’s invasion of Ukraine has reduced European production, which is a key part of the globally integrated auto industry.
Production constraints pushed the industry into a recession-like state, but the Federal Reserve suddenly decided that high inflation was systemic, not temporary, and raised interest rates. It was started. This put the brakes on demand for full-size pickups. This is highly correlated with new housing starts and still affordable prices for rare used cars.
While COVID-19 has been a very profitable time for automakers and retailers, it has been a particularly difficult time for suppliers, with inconsistent and unpredictable production schedules and lower overall output. We’ve worked on it. Next year, we may see a return to more normalcy in terms of factory output and sub-list-price sales.
Another sign of a return to life like normal is the back-to-the-office practice that General Motors and others are aiming to revive.
But we are back in a changed industry. More digital retail, more EVs.
The EV market has been reshaped by Senator Joe Manchin’s provision on taxpayer assistance. Battery and electric vehicle assembly plants are under construction across North America. And with the new year comes a new system for allocating credits to eligible purchasers of eligible zero-emission vehicles…finally, not January 1st.
The new year will also bring the culmination of direct suffrage for the UAW’s historic board of directors, which has so far been largely unused. In his 2023, the Detroit 3 will be negotiating not only with the more militantly poised UAW, but also with his Unifor in Canada with new leadership following its own scandal.
Is this normal? At least that year will be a new year.
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