The auto market outlook for 2023 is better than previously expected, though new orders are weakening in some regions (notably Europe) and the impact of higher interest rates and potentially weaker labor markets should be felt in the second half of 2023 and 2024. Original equipment manufacturers should be able to mitigate this year's pressure on margins from weaker pricing with model-mix based strategies and product launches, though the risk of margin contraction will be greater in 2024. Auto suppliers' positive production momentum should support upward revisions to guidance, with easing supply-side constraints signaling an end to a two-year catchup period. Inflation remains their main concern.