Auto sector past its worst, but slow recovery ahead

The slump in auto production related to supply chain disruptions has dragged down the pace of the global recovery this year. And while there have been some indications that supply of auto parts is starting to pick up again, meaning there is scope for an initial strong rebound in production as factories reopen, the overall recovery in output is still likely to be relatively slow. Pent-up demand for new vehicles suggests that there will also be a rebound in auto sales as supply improves, but prices have also soared in the US, which may rein in demand there.