The recent conflicts around the globe and Russia’s attack on Ukraine will cause all sorts of problems around the world. Some of the problems include the prices of things such as phones, cars, and computers going up. Some Car factories have been shut down temporarily since the car parts coming from Ukraine are now not available. This may also have a ripple effect on the USA auto market. Many German automotive companies and their suppliers have sites in Ukraine and Russia and even though the long-term effects of these are not clear right now, one thing is for sure, there will be a shortage of vehicles in the short term and that will lead to higher car prices.
The cost of raw materials is also going up. With the increase of raw materials with aluminum prices at record high in recent times, most vehicles will be costlier to build. That is because Aluminum is used in chassis and engine components as well. One important thing to keep in mind is that Russia happens to be one of the world’s largest aluminum suppliers. With so many sanctions being imposed on Russia, it is difficult to determine what the future of metal export from Russia will be like. But experts are expecting metal pricing to rise drastically once transportation is disrupted.
With an increase in raw materials costs, the pricing for cars will also go up. With Covid last year, the production of cars was disrupted with fewer chips being manufactured and transported. With this war, the problem will increase exponentially in the foreseeable future. Anyone looking for a new car has noticed a hike in automobile prices in the last year. With the ongoing war, the prices will not go down any time soon.
Oil prices have been on a rise as well since the whole situation with Russia and Ukraine has escalated. With so much uncertainty, itis difficult to say what the long-term impact will be, but one thing is for sure. With oil prices increasing, the cost of transportation for every component will go up. If the prices continue to rise over time, it could lead to car shortages in the market and thus impact the car shoppers in the market. Not only that, with the growing uncertainty of global war, automobile shoppers may take a step back and realize now may not be a good time to buy a vehicle after all. They may decide to hold off until things settle. With Russia and Ukraine war, there is a strong possibility of other countries getting involved. More sanctions might be imposed on Russia but that will also affect the automobile industry big time.
Rising Aluminum and Oil prices will in turn affect the consumers in terms of willingness to purchase a vehicle or even ability to buy one at this point, even with an improvement in automobile inventory. If you are in the local market looking for an auto loan, worry no more. At Any Credit Auto Loans, we can offer pre-approved auto loans at the best rates in the industry. Contact us today to get more details.