Expect Higher Car Prices to Stick Around for a Long Time
If you have been in the market for a new or used car, you know that inflation has hit that industry hard. Expectations were that prices would start to come down a little because the cause of the supply change disruption has started to subside - mainly COVID. Then you see this headline –
"Audi expects 'tremendous interference' to global supply chain due to Russian-Ukraine war" (the link to this article is in the image above)
It appears that Russia and Ukraine supply key raw materials and vehicle parts to the auto industry. The article goes on to say that the “Ukraine also is a notable supplier of wire harnesses and other materials, largely for European automakers.”
Some say that the war has put the Ukraine back 30 years economically, and Russia is not in good economic shape right now. How long, in the best-case scenario, will it take to get supplies moving again?
I would predict that what effects the European car market will affect the U.S. market as well. That continues pressure on new car prices and used car prices all across the globe. The difference is that Europe will have legit, new supply chain issues while the U.S. market will have an excuse to keep prices higher than normal because of old supply change issues.