Youllsee’s Post

Will #China disrupt the global automotive industry? With major state support, Chinese #EVs are outpacing global competitors. How are other economies responding, and what does it mean for Turkey? I discussed this in my column last week: https://lnkd.in/dYqfxyZj

Is there a light at the end for Europe’s auto industry? The Minister of Economy of Austria, the Governor of Styria, the President of the Industrial Association, and representatives of BMW and Siemens will convene at a round table meeting with Chancellor Karl Nehammer (https://lnkd.in/dC55X-Za). The primary question to be addressed is: What will happen to the Austrian and European automobile economies in light of the EU’s demand to ban combustion engines by 2035? If no action is taken, it could result in the loss of hundreds of thousands of jobs and jeopardize industrial independence. The ban on internal combustion engine (ICE) cars in 27 EU countries poses a significant challenge for the automotive industry in Europe. The definitive nature of the solution is linked to the ‘Fit for 55’ strategy, which aims to reduce emissions by 55% by 2030 and achieve carbon neutrality by 2050. Currently, automobiles account for 12% of emissions, and the transition to electric cars was expected to boost GDP through the upgrade of the 250 million-vehicle fleet. However, the European automobile industry was not fully prepared for the threat of increased imports from China. There is an evident solution. Firstly, an increase in trade barriers for electric cars from China, following the example of the US, which raised import tariffs on goods from 25% to 100% (https://lnkd.in/duwQyynR).  Secondly, there is a proposal to include a "National treatment Investment Regime" (https://lnkd.in/dCk7hA7R) within the EU for the technology and production of lithium-ion energy storage, which is crucial for Europe’s energy security. Thirdly, "National treatment in investments" and accelerated implementation of Industry 4.0 principles will enable reindustrialization while maintaining high-quality standards and the European social safety net. Automated and robotic production in all aspects of the 21st-century electric vehicle supply chains will provide a new impetus to the European automotive industry and offer an opportunity to compete in the global market.

3 #key highlights from this #week in the #global #automotive industry: 1. **European Road Map**: Europe's automotive industry is adapting to major changes, including a shift from internal combustion engines to electrified powertrains and a focus on software differentiation¹. 2. **Sustainability Push**: The industry is working towards a more resilient and sustainable supply chain, amidst challenges like geopolitical tensions and supply chain disruptions². 3. **China's Market Disruption**: China has become a significant competitor, surpassing Germany in light-vehicle exports for the first time in 2022¹. These developments indicate a transformative period for the automotive industry globally.

Industrial closures are increasing and one of the things not to be ignored is the lack of strategic and critical materials needed for industrial success. Coupled to that Europe simply lost the basic inputs for energy at strategic cost positioning. In auto the malaise is even deeper with almost all future suppliers located far away from Europe. It makes better sense to either put up plants closer to suppliers or ask the Chinese to put theirs within Europe. The control of the auto CPU has moved towards the suppliers. European light vehicle sales, while cyclical, are well below their peak, but 22.4mn in 2007 compares with a market of only 17.8mn in 2023, or a 4.6mn (22%) de-growth. No wonder in the near term between 2018 to 2023, the European GDP hardly made a gain of a few $100 billion, while in the same period U.S. added a few Trillion! Let’s not compare China. European Union GDP for 2022 was $16,746.54B, a 3.28% decline from 2021. European Union GDP for 2021 was $17,315.22B, a 12.57% increase from 2020. European Union GDP for 2020 was $15,381.17B, a 1.99% decline from 2019. European Union GDP for 2019 was $15,693.43B, a 1.8% decline from 2018. When you study performance of individual industrial companies, the data points to a lost decade, with only a few exceptions! Some say, that no wonder, we see bagpipes back, to march, both will do, whether the Left or the Right!

European car manufacturers are facing an unprecedented period of disruption. Stricter emissions regulations, lower profitability from electric vehicles (EVs), and competition from China have put industry giants like Volkswagen Group and Stellantis under pressure. In a shrinking market marked by inflation and a slow post-pandemic recovery, the sector struggles to adapt to a context that threatens its future and its 7% contribution to the European Union’s GDP.  Volkswagen, a flagship of the industry, exemplifies this crisis. Despite reporting record profits in recent years, its stock has hit 14-year lows, and the company faces fines of up to €1.5 billion for failing to meet emissions targets. Labor tensions have escalated, leading to strikes as the company considers closing factories in Germany. Other manufacturers, such as Stellantis and Ford Motor Company, are also cutting jobs and facing internal conflicts, reflecting the scale of the challenge.  The European EV market, initially driven by subsidies, has lost momentum. #Germany, its largest market, saw sales plummet after incentives were withdrawn, while consumers remain wary of high prices and insufficient charging infrastructure. Starting next year, manufacturers will need to significantly increase their EV sales to meet new regulatory standards or face additional fines, adding pressure to an already weakened industry.  Production costs have been rising, particularly in Germany, which lost its supply of cheap Russian gas amid the war in Ukraine. This year, the combined profit of Volkswagen, Mercedes-Benz AG and BMW Group is expected to fall by a third. Analysts see only a modest recovery next year. Beyond internal difficulties, Europe faces fierce competition in its own market. More affordable Chinese EVs are gaining ground, while exports, a traditional European strength, have fallen 16% compared to 2019. In China, one of its key markets, demand has collapsed due to the economic slowdown. On top of this, potential new tariffs from the U.S. and China could further raise the costs of global operations for European automakers.  The loss of technological leadership is another critical factor. Europe, once a trailblazer in automotive innovation, now depends on startups in China and the United States for EV technology development, while rivals like Tesla and BYD dominate the sector. The European automotive industry, a pillar of global economic growth in recent decades, faces a transformation that could diminish its relevance and competitiveness on the world stage.  https://lnkd.in/d6qc_KdX #automotiveindustry #electricvehicles #china #europe #leadership #USA MG Motor Europe AUDI AG Volvo Group Porsche AG

Chinese automakers are on a trajectory to achieve global dominance in the automotive market by 2030, with an expected market share of 33% worldwide. Despite efforts by the U.S. to protect its domestic market through trade policies and tariffs, Chinese brands are rapidly expanding their presence in international markets, particularly through aggressive electric vehicle (EV) production and strategic investments in regions like Europe, Mexico, and South America. This expansion is bolstered by significant government subsidies, competitive pricing, and advanced technological capabilities. The rise of Chinese automakers poses a substantial challenge to Western manufacturers, who face a shrinking market share both globally and within China. #chineseautomakers #globaldominance #electricvehicles #evmarket #automotiveindustry #breakthroughenergy #marketshare #globalexpansion #china #europe #southamerica #digitaltransformation #automotiveinnovation 

📢 The persistent financial and structural difficulties raise urgent questions about Europe’s capacity to remain competitive in the global automotive landscape.    The latest #CLEPADataDigest reveals that the automotive supply industry is struggling with lower production volumes, suppressed profitability as well as the pressing need to invest in the green and digital transition. 🔵 Despite some positive developments, including a modest recovery in the trade surplus due to falling battery imports, the industry’s ability to fund and execute the necessary investments for a successful transition is waning.  🔵 In the first half of 2024, the EU accounted for only 14.6% of global value creation, down from 16.5% in 2019    👉 Find out more about the health of the auto supply industry here:  https://lnkd.in/etng6tep   #AutomotiveSuppliers

It's hard to think that four years have passed since the onset of COVID-19. Its impact was felt worldwide, particularly within the automotive industry where we experienced its effects firsthand through disruptions in the global supply chain related to vehicles. #covid19 #pandemic #supplychain #worldrecovery #worldwideimpact #automotiveindustry #automotive #ffun #autotrends https://lnkd.in/gfDf9FzA