Top Legal Issues Facing the Automotive Industry in 2022 | Blogs | Dashboard Insights

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Expect the Unexpected: Approaching Raw Material Shortages, Labor Issues, and Freight Increases and Delays in 2022 

I. Introduction

           
           
           
           
           
AUTHORS           
Ann Marie Uetz | [email protected]     
Vanessa Miller | [email protected]   
Nicholas Ellis | [email protected]     

In 2022, automotive suppliers face many of the same issues that have bedeviled the industry throughout 2021, as well as a host of all-new challenges. Unfortunately, as with many aspects of pre-pandemic life, the relative stability in the global supply chain that the automotive industry enjoyed for many years is unlikely to be restored any time soon. Suppliers must be agile and adapt to these new and continuing challenges.

This article highlights several key areas of focus for suppliers looking ahead, including seeking greater flexibility and risk sharing in pricing, warehousing/inventory, and managing freight costs. Among other strategies, suppliers should consider updating many of their traditional operational and contracting practices in order to enhance flexibility in a more unpredictable world. While the changing landscape presents challenges, it also presents opportunities for growth. The suppliers that best adapt will be the companies that are positioned best to thrive going forward.

II. The State of the Automotive Supply Chain as We Enter 2022

For many automotive suppliers, 2021 was a year defined by shortages, increased costs and other unprecedented supply chain challenges. The lockdowns of 2020 quickly gave way to shortages of many raw materials and components, as supply could not keep up with surging demand. While the global shortage of semiconductors may be the most publicized of these issues, many suppliers also faced difficulty in obtaining other materials, including steel, resin, and foam. In keeping with the law of supply and demand, these shortages quickly turned into rapidly escalating costs for many suppliers, with hefty price increases that were not contemplated in suppliers’ quotations, and in many cases they were not expressly covered by their supply contracts.

In addition to difficulty obtaining materials, automotive suppliers faced significant operational and logistical hurdles. Suppliers encountered and continue to face difficulties in obtaining sufficient labor to keep their plants running at full capacity. Suppliers also had to contend with myriad logistical challenges, including port delays, the Suez Canal blockage, a dearth of containers, a scarcity of truck drivers, and massively increased costs for shipping. The cost of shipping containers from Asia to the United States soared, reaching in excess of a 500% increase from just a year earlier.1 Suppliers also faced surging costs for labor. Under the burden of these significant challenges, the automotive supply chain exchanged a fresh wave of force majeure declarations and notices of commercial impracticability.  Unlike the case in 2020, when most of the automotive industry shut down in unison, such declarations often were the subject of significant disputes as parties wrangled over responsibility for costs and tried to maintain operations.

Compounding these difficulties, many suppliers’ efforts to manage their supply chain were further complicated by the actions of their OEM customers. Faced with shortages, many OEMs reacted by ramping up their releases to

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BizVibe Highlights Key Challenges Facing the Automotive Parts, Accessories, and Tire Stores Industry

NEW YORK, Nov. 3, 2021 /PRNewswire/ — BizVibe has added key challenges and trends for automotive parts, accessories, and tire store industry profiles on their platform. All 17,000+ company profiles will now contain 50+ company data points, including a list of potential challenges which are expected to impact market participants over the next few years.

Snapshot of key challenge impacting BizVibe’s automotive parts, accessories, and tire stores industry group.

One challenge which is being highlighted is the current drop in automobile sales. Multiple factors are affecting automobile sales, including the rise of shared mobility ecosystems, improvements to public transport infrastructure, and sustainability concerns. To add to these challenges, COVID-19 lockdowns, social distancing norms, and decreased disposable income have discouraged customers from car purchases for a prolonged period. Sales of auto parts are directly dependent on the number of vehicles on the road, and therefore sluggish or declining growth in automobile sales is expected to also impact the growth potential of these stores. By identifying such challenges, BizVibe is helping users analyze which suppliers are right for their business, while allowing them to efficiently monitor the risk of doing business.

Get Free Access to all Industry Challenges

Key Insights Provided for Automotive Parts, Accessories, and Tire Stores

In addition to analysis on how key challenges are expected to impact businesses, BizVibe company profiles contain numerous high-quality insights to help users discover, track, compare, and evaluate suppliers or sales prospects. These insights include:

  • Relevance and influence of industry trends and challenges, segmented by region

  • Press releases and news coverage referencing key trends and challenges

  • Risk of doing business score, segmented by operational, financial, compliance, and country risk

  • Top company competitors at the global, regional, and national levels

  • Names of top company decision makers, including job titles and social profiles

  • Company financials such as annual revenue, profitability ratios, and management effectiveness

View 50+ Company Data Points for Free

Automotive Parts, Accessories, and Tire Product and Service Categories

BizVibe’s platform provides access to 30M+ buyer and supplier company profiles. Businesses from more than 200 countries are categorized into 40,000+ product and service categories, each providing detailed insights tailored to the needs of procurement and sales teams globally. The automotive parts, accessories, and tire stores industry group features 17,000+ company profiles categorized into multiple product and service categories, enabling clients to identify and connect with potential new business partners across diverse market segments.

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BizVibe for Buyers and Sellers

BizVibe is a modern B2B platform dedicated to connecting buyers and sellers from around the world. Powered by the latest best-in-class solutions, BizVibe is designed to help companies generate leads, shortlist suppliers, request proposals, and identify global companies. Evaluate companies side-by-side to compare key metrics and initiate productive partnerships.

Buyers use BizVibe to discover suppliers from among more than 5 million companies using advanced search filters and comparison tools. Features for buyers include:

  • Shortlist potential suppliers

  • Track and compare companies

  • Set up custom news alerts

  • Quickly

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