With many jobs relying on it as a driver for other industries

The world economy.. The decline of the auto industry endangers the global economy

The automobile industry accounts for about 3% of global economic output.

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The auto industry is a strong driver of the global economy, but the turmoil in factories in a number of countries threatens the growth of this industry and puts the global economy at risk, because many jobs depend on this sector, which is one of the biggest drivers of other industries, such as steel, plastics and raw materials, The automakers are the biggest consumers of it.

The American newspaper "New York Times" reported that "every car that does not move from the assembly line in cities such as Detroit in the United States, Stuttgart in Germany, or Shanghai in China, puts jobs at risk."

She added that iron miners in Finland and tire manufacturers in Thailand are suffering from a shortage of supplies and declining shipments, which is forcing car factories to reduce production.

economic output

The auto industry represents about 3% of global economic output, as in auto manufacturing countries such as Germany, Mexico, Japan, South Korea, or even American states such as Michigan, the percentage is considered much higher, and therefore the slowdown in the auto industry has implications. Negativity takes years to recover from.

Semiconductors

Shock waves from the semiconductor shortage crisis almost forced automakers to temporarily shut down assembly lines, as the crisis is strong enough to push some countries into recession. Exports increased by 46% during last September, compared to the previous year.

And some car manufacturers were able to mitigate the crisis by raising prices and holding car buyers responsible.

Reflection of the crisis

The crisis is reflected remarkably on people who buy cheap cars, because car companies have allocated the rare chips available to expensive vehicles that make the most profits, which leads to long waiting periods for less expensive cars, and the prices of used cars are also witnessing a significant increase due to the shortage of new cars.

The car factories crisis dates back to last year when prices for key raw materials such as steel and copper began to rise, according to Vereen Bubley, CEO of Mahindra North America, an arm of the Indian auto giant that makes tractors for the US market at an assembly plant. Tractors in Bloomsburg, Pennsylvania.

loss

A study by the International Monetary Fund showed that unemployment caused by the closure of car factories will continue for years.

Semiconductors aren't the only components in short supply, said Dan Hirsch, managing director of the Detroit office of global consulting firm Alexei Partners. Automakers are also looking at the type of plastic used to hold windshield wiper fluid and shape the dashboard.

He added that due to a shortage of the small mount used in SUVs, the amount of time it takes to repair a vehicle damaged in a crash has increased to about 20 days from 12 days.

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