SEMA's Industry Indicators report discusses impact of Russia's invasion of Ukraine on automotive industry

SEMA recently released its monthly  Industry Indicators report, which led with the news of Russia's invasion of Ukraine.

Both Russia and Ukraine are major exporters of commodities. Russia is the world’s largest exporter of wheat and the second-largest exporter of oil. Russia provides 30 percent to 40 percent of Europe’s oil, gas, and coal — or roughly four to five percent of the world’s energy. Russia and Ukraine are both major exporters of commodities like neon gas that are used to produce semiconductors. Oil initially traded over $100 for the first time since 2014, but sanctions imposed thus far do not include the energy markets, the report said.

"Several auto companies with production facilities in Ukraine and Russia have suspended operations. J.D. Power and LMC Automotive lowered its global light-vehicle sales by 400,000 to 85.4 million units, in part due to rising oil and aluminum prices that could discourage buyers," SEMA's February  Industry Indicators report said.

Vehicle miles traveled increased by 11.2 percent (+26.9 billion vehicle miles) in December, compared to a year ago. Seasonally adjusted vehicle miles traveled for the month totaled 278.3 billion, a decrease of 0.4 percent from the prior month. Cumulative travel for 2021 is up 11.2 percent. For the month, the Northeast region saw the biggest increase compared to December 2020, rising 15.2 percent. This was followed by the South Atlantic region (+11.5 percent), North Central (+10.8 percent), West (+10.5 percent), and South-Gulf (+9.4 percent).

Consumer spending on new vehicles rose strongly in January, increasing 22.3 percent after a two percent decline in December and a 0.4 percent decline in November. Spending is up 12.9 percent over the last year and up 40.2 percent since January 2020. 

Spending on parts and accessories rose 5.6 percent. It is up 12.8 percent over the last year and up 29.1 percent over the last two years.

Production of auto parts rose 0.6 percent in January. Parts production is down 2.6 percent from last January, but up 8.6 percent over the last two years. The auto sector continues to be strained by supply chain disruptions. Total auto production which includes vehicles and parts was down 0.9 percent for the month and is down 6.2 percent versus a year ago. Non-auto manufacturing is up 3.3 percent over the same time, the report found.

Overall industrial production increased 1.4 percent in January, driven in large part to high utility sector output which is volatile and typically driven by abrupt shifts in temperature. Manufacturing output was up a tepid 0.2 percent.

New vehicle sales continue to be constrained by low available inventory and supply constraints. New vehicle sales are down 10.5 percent over the last year, and new vehicle inventory is down more than 50 percent from a year ago.