Last year brought bumper profits for car makers even as production remained depressed due to shortages of key parts.
But as those shortages ease, investors want to know whether those car makers can sustain high margins with greater competition for their products. At the same time, consumers are asking the same question from the other side. Will increased production mean we can buy cars more cheaply?
Evidence is emerging that the year will be good for car buyers, less good for car makers, triggering a warning from analysts.
“OEMs will likely see difficulties in maintaining price discipline and high mix,” Patrick Hummel, chief autos analyst at the bank UBS, told clients in a note.