It's no secret light vehicle production bottomed out in 2020. But when will it return to or surpass its peak?
Bill Hyde has some idea. During his presentation, he set the stage for synthetic rubber market trends by examining how the auto industry could impact demand. And to do that, he focused in on light vehicle production.
"It is always interesting for those not close to the automotive sector, they might not know that the automotive production peaked in 2017, not 2019 before the pandemic," said Hyde who serves as vice president of olefins and elastomers for Chemical Market Analytics.
In 2018 and 2019, auto production slumped a bit. It just never could get back to that peak.
"The expectation was that, in 2020, we would start to return to the trend line," Hyde said. "Well, we didn't."
And for that, you can thank COVID-19. Auto production in 2020 halted, supply chains upended and, well, the rest is history.
Since then, though, the automotive industry has made a steady rebound. And that should continue in the years ahead. Globally, Hyde said, auto production is expected to grow and ultimately return to those pre-pandemic levels by 2025 or so.
So, not ideal, he said. But the industry is moving forward.
What is more concerning is the country-by-country production level projections.
"If you look at that on a country-by-country basis, it is much, much worse than that," Hyde added, pointing to Oxford Economic figures that extrapolate out through 2030. "Europe basically never gets back to the 2017 peak. ... Northeast Asia outside of China, really never gets back to the prepandemic peak."
Mainland China is expected to lead the global rebound.
And North America will follow in its footsteps, likely surpassing that 17 million unit production mark sometime in the next two or three years.