The European automotive industry has many open fronts that represent a real drag that threatens to lead to a dramatic situation. The cost of energy has skyrocketed, the shortage of semiconductors is affecting vehicle production centers and, as if that were not enough, now a new threat is emerging. The shortage of magnesium.
The automotive sector in Europe live some real turbulent times. There are many open fronts that this very important industry must deal with and that threaten to become a heavy burden that prevents the recovery process that had begun at the time the situation generated by the coronavirus pandemic that burst onto the scene was controlled. in the first quarter of 2020.
In recent weeks the focus has been especially on the semiconductor shortage. And is that the lack of microchips that are essential to car manufacturing is something the industry has grappled with for months. A situation that does not improve and that, as expected, has already been transferred to the sales figures for new cars in Europe.
Car sales in Europe show lack of microchips
In recent months the Sales figures have been particularly affected by the semiconductor shortage. The shortage of these components has forced a reduction in activity in the vehicle production centers and, therefore, if fewer cars are manufactured, the stock available in the dealerships is quickly suffered. The waiting list to receive a new car in Europe has skyrocketed and in some cases far exceeds half a year.
Manufacturers have also been forced to make adjustments to the equipment of certain models to adapt to this situation and even to prioritize markets as well as models. The The case of the Chevrolet Onix in South America is a clear example of this.
Returning to the Old Continent, the lack of microchips is nothing more than a heavy stone for the automotive industry that it already had to face the economic uncertainty directly derived from the coronavirus pandemic. Unfortunately, it is not the only challenge that must be faced. The unstoppable rise in energy costs is something that cannot be ignored in European car factories.
AdBlue production in Europe has stopped
As if the semiconductor crisis were not enough, we must also bear in mind the unstoppable rise in energy costs. The price of electricity and gas is experiencing an unstoppable rise. And there are no signs that this could stabilize (and let’s not talk about reversing) in the short term. Logically, if energy is more expensive, car factories are also affected.
Just a few days ago the news broke. High gas prices have forced the production of AdBlue in Europe. We must bear in mind that this additive is used by hundreds of thousands of vehicles and that it is necessary for them to circulate. Well three European colossi of AdBlue production, have had to temporarily stop the activity.
The Slovak Duslo, the Italian Yara and the German SKW Piesteritz, are the companies affected by this situation. After breaking the news, in various European cities drivers and carriers have started to stockpile this additive. And it has even been the case that member states of the European Union have confirmed that they will carry out strategic purchases to ensure supply.
Again, if there is a shortage of AdBlue or a more than foreseeable price escalation, it will be another equally determining factor and which, logically, will have consequences on the proper functioning of the European automotive industry.
Magnesium shortage threatens the automotive industry in Europe
To this “perfect storm” we must add the last “actor” who has made an appearance. Magnesium As if the situation weren’t worrisome enough, a new rift has now opened. And it is neither more nor less than the magnesium shortage, the new threat to the automotive industry in Europe. It could undoubtedly be the last straw for the supply crisis to turn into a major European industrial blackout.
From the automotive sector in Europe there has been an urgent call to action against the imminent risk of production stoppages throughout the territory as a result of a critical shortage in the supply of magnesium from China. Magnesium is a key alloying material and is widely used in the metal production industry. Therefore, its shortage is a serious problem for the automotive industry.
The world demand for magnesium is 1.2 million tons per year. China is the major producer as well as consumer of magnesium. Specifically, China consumes 39% of the total while producing 87% of world supply. Both in Europe and North America, magnesium consumption amounts to 19%. Europe is one of the regions mainly affected by this situation since practically all the magnesium used in the European territory is imported from China.