LANSING, Mich. (WILX) – A global shortage of magnesium might shut down the auto industry driving prices of cars even higher. The auto industry is taking a big hit. Bernard Swiecki, Director of Research for the Center of Automotive Research said there is already a shortage of semiconductors, rubber, petrochemicals, and microchips.
To add insult to injury, there is a worldwide shortage of magnesium, which is a vital material to making cars. Without it, many parts can’t be produced.
China is the world’s primary magnesium supplier and the country is currently unable to export it due to an energy crisis. Because of this, auto production could be even more limited moving forward.
Swiecki said, “Shutdown probably not, at least not in the united states. The good news is we have a domestic supply of magnesium that can fulfill our needs. But that does come with a problem. Even if there is a supply, prices could go through the roof.”
This could mean higher prices for vehicles, which are already setting records.
According to Swiecki, “Right now the average transaction value is over $45 thousand per unit. We’ve never seen levels that high. If we see this magnesium dynamic hit us it will raise prices even further. Which puts those vehicles out of the hands of most consumers.”
Swiecki said it’s only a matter of weeks before we see car prices rise. The impact of the magnesium shortage will be felt throughout the country, not just in Michigan.
News 10 reached out to General Motors for comment to see if they’re expecting to be affected. We have not heard back.
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