Carmakers Face Challenges as ECB Plans to Raise Interest Rates Further

The first quarter was a relatively good one for the world’s biggest carmakers, and consequently their share prices, but the European Central Bank’s (ECB) plans to raise interest rates further raise concerns that Europe’s biggest manufacturers will face significant challenges for the rest of the year.

Automakers experienced the same problems as the entire technology sector during the pandemic – logistical problems that caused delays in deliveries of parts and the cars themselves, shortages of microprocessors, and reduced consumer demand for cars.

For example, total German car production fell to 3.3 million vehicles at the end of 2022, compared to nearly double the level six years ago, according to The Washington Post. Not only the pandemic is to blame, but also the rapid increase in energy prices.

After the pandemic ended, most of these problems were resolved and the companies were able to show better profit figures. However, the global fight against inflation threatens to cause a new wave of misfortunes, as the purchasing power of consumers decreases.

The beginning of the year is not bad

General Motors and several other automakers reported in April that sales of new vehicles rose sharply in the first three months of the year, thanks to improved supplies of key components and solid demand from both consumer and commercial customers, The New Yorker reported. Times”.