Consumer demand for durable goods has taken a nosedive in recent months, and overall spending is down as people grapple with the possibility of a recession. Naturally, most sectors, especially retail, are experiencing weakened demand and falling volumes.
This is not the case, however, for the automotive industry.
“Motor vehicles enable the consumer to leave the house, something they have not been able to do as much of over the past two years,” FreightWaves Market Analyst Zach Strickland recently reported. “Combine this with easing supply chain congestion, automotive manufacturers are now able to finish vehicles that have been awaiting completion. This sector is having a bit of a renaissance, with growing demand for electric vehicles as well.”
Rail carloads for motor vehicles and parts have climbed over 9% on a year-over-year basis. This continues to point toward growing demand and strong manufacturing activity.
While automotive has not seen the same demand drop as other sectors, the industry is still coping with a slew of headwinds. In fact, some of the factors leading to this demand increase — like the rise in popularity of electric vehicles — are also placing considerable pressure on manufacturing efforts.
The automotive industry is currently facing a triple threat when it comes to managing supply chains.
