2023: a year of transition

The 2023 auto market has started with a plus sign in many countries, an encouraging sign although some points should be clarified to have a clear understanding of the phenomenon.

Positive start in Europe with +18% and in North America with +8% in the first three months of 2023. In both countries, however, we compare with 2022 when in the same period the market had been very weak mainly due to severe semiconductor shortage and the outbreak of the Russia-Ukraine war.

In China, on the other hand, the start of the year was not the easiest, with a lower level of sales than last year (-7 percent), although this was due to the month of January with the combination of New Year celebrations and unexpected lockdowns.

Even if we look at production, the figures recorded so far are satisfactory considering that in the first quarter of the year they were in line with forecasts and slightly up on 2022 (+6%). We are certainly not talking about a boom registrations and a strongly growing market, but already the fact that the market is following the expected path is positive (or not negative if you will). Especially when we consider that, in the first quarter of the last 3 years, we had to witness nefarious events of a global nature.

So, looking to the months ahead, with a dash of healthy optimism, we expect world market growth of 6 percent to more than 83 million vehicles, more pronounced in Europe (+8 percent) and North America (+7 percent) and less so in China (5 percent). These are still far from the precovid period, especially in Europe with -20% of registrations, but they mark a positive discontinuity after a difficult three-year period. Moreover, at the economic level, some analysts have removed recessionary assumptions for the old continent from their forecasts.

Thus, 2023 could be a transitional year precisely because it should mark a reversal of the trend. Covid is close to being considered an influenza and no longer a pandemic, as announced by WHO. Instead, global supply chains are gradually realigning, and the semiconductor crisis should end between 2024 and 2025.

2023 will also tell whether large OEMs will still be able to sustain the sales model of low volume and high margins, which is difficult given the decline in consumer purchasing power eroded by continuing runaway inflation.

On electrification, it is not yet known whether Europe's 2035 targets will be confirmed or revised with the acceptance of combustion engines powered by synthetic fuels.

So there are several reasons for interest in following the evolution of the market, with 2023 like a year of adjustment after the great reshuffle, and of transition in order to understand how all these variables will shape the market in the coming years.