COVID-19 is still taking a toll on everything. Europe is somewhat back up and running again at almost full capacity, but there’s another problem now. While factories like Ducati’s Panigale plant are now up to speed again and even offering tours once more, it’s hard to alleviate supply chain woes, especially for some rarer minerals.
The effect of the initial lockdowns is still being felt today, while not direct per se, it is still a hard pill to swallow for many manufacturers. Now, however, we’re getting news that an impending magnesium shortage will occur, which is already on top of a widespread semiconductor shortage that not only affects motorcycles but cars and other consumer electronics as well.
It doesn’t help that 95 percent of the magnesium in Europe is supplied by China. There’s so little stock on hand that sources are stating that there hasn’t been a shipment since September 2021. Magnesium prices have ballooned up to seven times more than their rate back at the start of 2021. In tandem with the semiconductor shortages the entire industry is facing, this could very well spell a lot of trouble for European brands that rely on a constant supply of reasonably-priced raw materials to make motorcycles.
This means that brands might price their products higher or run into shortages at the dealership level. The KTM group reported slow growth than expected. Also, Indian giant, Bajaj is feeling the pinch from shortages.
The European Association of Motorcycle Manufacturers is calling for semiconductor production to return in order to ease the strain on manufacturers.
Analysts are still speculating when the semiconductor industry will bounce back. It’s possible that the earliest recovery will be in mid-2022, while the latest could be in mid-2023. Sadly, that could seriously affect a lot of brands since it’s already been about two years since the COVID-19 pandemic started creating problems.