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A little-noticed explosion last month could disrupt the supply chain for global automakers for months, according to Morgan Stanley economist Ted Wieseman.The March 31 explosion at the Evonik factory in western Germany, which tragically killed two, affected half of worldwide supplies for a resin essential to autoparts manufacturers. Wieseman says near-term auto sales are likely to get hit by the event, which he said has knocked the factory off line “potentially for months.”
Wieseman maintains his 2012 forecast of 14.8 million auto sales.
Here’s the full excerpt from his note.
Finally, initial industry reports pointed to a further pullback in motor vehicle sales in April, with the surge in gas prices proving a near-term headwind. Our preliminary initial forecast is for a decline to a 14.0 million unit annual rate from 14.3 million in March and the four-year high of 15.0 million in February. The underlying sustainable trend is probably better than that – our forecast for the full-year sales pace is 14.8 million, same as our equity research autos team – but we may be faced with yet another round of supply chain disruptions hitting sales in the near term after an explosion at a chemical plant in Germany reportedly has knocked off line, potentially for months, half of global supplies of a resin that is a critical input to the global auto parts supply chain.
According to Detroit News, the automakers said they have yet to make production changes, though GM CEO Dan Akerson said they could only be sure of their supplies through the end of May