UBS: Global Excess Car Output to Intensify Pricing Pressure

UBS analysts said on April 3 in a report that global light vehicle production will greatly exceed sales this year.

UBS expects 85.8 million new vehicles will be added to the market, up 4% from last year, while sales will be just 81 million, compared with 79.4 million last year.

In this way, production may be 6% higher than sales, which will significantly increase inventory and even exceed the level before the Covid-19 pandemic.

“The pent-up demand forecast by the automaker is not strong enough to justify the launch of all new models. Given the optimistic production schedule, we see a high risk of overproduction and therefore mounting pricing pressure," UBS said.