Pundits everywhere are prognosticating how a potential recession could affect supply chains in 2023. If a downturn materializes, many feel that current supply chain woes will ease.
Automakers and suppliers would be wise to look beyond these simple predictions.
The truth is that demand exceeds supply in the automotive industry right now, and inflation, while slowing, remains above inflationary targets. Furthermore, no massive new suppliers are on the immediate horizon for hard-to-procure components such as semiconductors, rare earth metals or other battery elements.
Therefore, most indicators point to 2023 being another year of supply chain problems. The most noteworthy aspect of the situation is how automakers and suppliers plan to address the ongoing challenge. Namely, by accelerating the establishment of their own production and supply chains —but only for certain elements.