Ripple effects are spreading across the automotive supply chain as global trade dynamics shift in response to US tariffs on imported vehicles and components. While the ultimate impact of these tariffs remains uncertain, they may support ABS recovery rates in the US due to an anticipated rise in used vehicle prices (see Tariffs May Offer a Temporary Boost to U.S. Auto ABS Recoveries). In contrast, Europe may face a different challenge—the potential for excess vehicle inventory.
Increased supply could occur on two fronts as vehicles slated for the US are redirected to the European market from manufacturers both within and outside Europe. Ongoing changes in global trade dynamics have already driven an increase in vehicle exports to Europe, particularly in the battery electric vehicle (BEV) and hybrid segments, intensifying the downwards pressure on…