Disruptions to the global economy are occurring more often and with greater impact than ever before, and the instability isn’t likely to change, said Giovanni Schelfi, partner at global consultancy firm Roland Berger.
The disruptions to the economy, and in turn the commercial vehicle market, are driven in part by geopolitical alignments, such as the war in Ukraine and assertive policies in China, as well as climate change, the COVID-19 pandemic and structural issues in the global supply chain, Schelfi said as part of a global economic and geopolitical overview during the Heavy Duty Aftermarket Dialogue outlook conference held on Jan. 16 in Grapevine, Texas.
The war in Ukraine, for example, hinders access to key raw materials, has led to distortions of global energy markets and resulted in significant cost increases, particularly in Europe, Schelif said. If current conditions persist, Roland Berger predicts a shift of sites and jobs elsewhere, even North America.
“Volatility is actually the new normal,” Schelfi said. “I think the times where we could do a 10-year strategic plan, and be fairly confident about being correct… these times are over with.”
Decline in Global Growth
Roland Berger expects a decline in global growth in 2023. The latest inflation numbers and labor market data are comparable to those during the Global Financial Crisis and the COVID-19 pandemic, Schelfi said.
While supply chain challenges were often considered short- and mid-term issues, that’s not the case now. Supply chain disruption is often driven by macro factors and could thus lead to longer term challenges. Furthermore, the current structural demand versus supply imbalance and logistics cost inflation are unlikely to disappear quickly. Inflation could continue to be a problem for the next two to five years, and beyond, Schelfi said. If this is the case, the cost of goods is going to be higher, especially in the West.
Impact of Shifting Focus from ICEs to ZEVs
Supply chain concentration is likely going to be a larger challenge for internal combustion engines as the global supplier landscape contracts with zero-emission vehicles on the horizon. This could have an impact on the industry for five years or more, Roland Berger predicts. This is because global focus on building out the ZEV supply chain will reduce supplier capacity and availability for commercial vehicle OEMs over time.
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