What's getting served in the Auto & Public Transport Industry of USA post-pandemic?

It seems a cease-fire between Russia and Ukraine is still not on the cards. Russia's Foreign Minister Sergei Lavrov ˜came to listen' and was not on the same page as Ukraine's top diplomat Dmytro Kuleba, who came empowered to make decisions on Ukraine's behalf, the latter stated. 

The gnawing effects of this war has impacted the world economy as much as it has concerned the common man. Ukraine has banned the export of wheat and other staples in favor of feeding its own citizens, affecting Egypt and Lebanon. Russia's import partners China, France, Germany bear collateral damage. The refugee crisis threatens to upturn the settled social landscape of modern European nations. 

The ˜leader of the free world', US President Joe Biden announced various sanctions intended to deal hammer blows to the Russian economy, including cutting off Russia's leading bank, Sberbank, from the American banking system, freezing assets of another major bank, and most importantly, banning import of Russian oil, coal, and natural gas inside the United States.   

The result - gas prices continue their dizzying ascent each passing day. President Joe Biden's comments didn't help either - when asked about the rising gas prices, his blatant quote was œCan't do much right now, Russia's responsible. 

Running Out Of Tires - Vehicle Manufacturers or the Russian Automotive industry? 

The global automotive industry has been facing the heat of the war as well. A CNBC article dated March 7, 2022 clearly states that cars and trucks are going to be the most impacted vehicle types in terms of global production. Interestingly enough, buses for sale found no mention in the article (we'll come to the war's impact on bus dealers and buses for sale in a bit).

Renault, the French automaker, observed an approximate 25% decline in its market value. Honda has halted export of motorcycles and cars to Russia. Nissan, citing logistical concerns, acted likewise. 

The assembly lines of Toyota, Ford, and Hyundai remain barren - all three have decided to halt production in their Russian factories. Local production in Russia and export to Russia, both have been paused by the elite Volkswagen Group. Aston Martin, Jaguar Land Rover, Mercedes, Audi, Volvo - all have reacted in unprecedented manners to the conflict. 

Whether these strategies affect Russia more or the manufacturers themselves in the long run remains a mystery right now. What's evident is that the reduction in global auto production will certainly impact consumers around the globe. 

But that's not it. 

Producers of Semiconductors - Russia and Ukraine 

The world relies on Russia and Ukraine for semiconductors. Semiconductors, for the unacquainted, are silicon chips that bus dealers and other vehicle manufacturers embed for a vehicle technological upgrade - right from navigation and driver-assist functions to Bluetooth connectivity and contributing to the engine control unit - semiconductors are required. Gauge the importance of semiconductors through this - they are also used in computers and cellphones. 

The semiconductor-grade neon gas required to produce semiconductors comes primarily from Ukraine. Now the shocker - Ukraine provides the USA with 90% of this raw material. And there's more - Russia is the world's largest producer of rare-earth metal palladium, another raw material that goes into the making of semiconductors. Russia produces approximately 45% of the world's palladium. Phelix Lee, Equity Analyst, Morningstar, opined that neon supplies would only get affected if the war rages on for over a month. As of writing this article, the war has indeed come close to a month, and would likely stretch on for more, seeing as the cease-fire talks collapsed. 

Not to be overlooked is the contribution of the pandemic in disrupting supply chain operations. The pandemic, halted global production and supply of cars and trucks, and the semiconductor shortage caused have compounded travel and transportation woes for the average American. 

Not All Is Gloom Though 

Even as we wait for the war to cease and fuel prices get back to normal, and the shortage of semiconductors to be plugged, the world continues to open up. Covid19 cases have seen a steady decline in most of the world recently. President Biden's State of the Union address was a mask less affair, a positive sign that America is reopening. The Governor of Florida, Ron DeSantis, even contradicted CDC guidelines by discouraging asymptomatic patients from getting tested. A March 2022 New York Times article cited the latest CDC guidelines where up to 70% of Americans can do away with masks. 

The removal of mask mandates holds a key implication - citizens will now increasingly opt for public transportation systems. Bus dealers can have a sigh of relief as buses for sale will now be purchased by corporations providing shuttle and other paid services to customers. As the lockdowns exit, and the car industry continues to grapple with the interim problems created by the pandemic and the Russia-Ukraine war, more companies will invest in public transportation systems and purchase transit buses, displaying strong signs of a market recovery. 

Chip Osborne, CEO of Nations Bus Sales, a Florida-based coast-to-coast Bus Sales Dealer, believes the trend will continue. œGiven the stagnant phase that the auto industry is facing where it has been forced to transition from the pandemic right into this global war, gas prices will continue to soar and impact overall overheads of businesses. The logical sequence that follows is that public transportation is going to thrive in 2022-23. We are seeing strong indicators of a rise in purchases for new and used buses for sale for Nations Bus Sales.

To Conclude

Russia's invasion of Ukraine has created a paradigm shift in the world economy, even as it was licking its wounds from the aftermaths of a once-in-a-century crisis in Covid. The United States sanctions on Russia have skyrocketed fuel prices. Meanwhile, mask mandates have been eased, which is a robust measure of a future where societies return to their pre-pandemic behavioral patterns

On the other hand, the automotive industry is being disrupted in its pursuit to unsettle the Russian economy. Global production of cars has reduced significantly. The transition phase where the US is withdrawing from lockdown measures and the interim instability in the automotive industry has created a white space for public transportation systems like shuttle buses to enter and permeate in, for the next couple of years.

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