Volkswagen starts the retreat from Russia. Frankfurter Allgemeine writes this morning that the company is looking for an investor to take over its factory in Kaluga, southwest of Moscow, where production was halted soon after the start of the war in Ukraine. Volkswagen said it was looking into various scenarios for the future of its business in Russia, including the sale of the plant in which more than 1 billion euros has been invested, which employs 4.200 people. In this way, the new one picks up speed, under the pressure of the political and military reality geography of the automotive world. Here are the main chapters.
Volkswagen withdraws from Russia. China on the move on Europe
S&P Global has recently updated the forecast of global automotive manufacturing, confirming the estimates of one + 6% growth in 2022. Slightly higher indications for China (+2% on previous estimates), offset by slightly lower numbers for Europe and North America. Also for 2023, global production was reduced by 1% due to a downward revision for Europe -2% and for North America -1% while they were confirmed for China and the rest of the world.
While the crisis in logistics and the supply of chips that has hit the sector is slowly beginning to be resolved, other causes affecting Western producers are at work: the markets – writes S&P – are increasingly coming to terms with thehigh inflation, the rate hike of interest and the spectrum of economic stagnation or the absolute contraction in key markets such as the United States and Europe western. Longer term, vehicle pricing will remain a key consideration and potential headwind to demand, particularly as many markets move towards much higher levels of electrification.
Auto: the EU market is in crisis, China dominates in the electric sector
The president of 'That (the association of manufacturers operating in Europe), the CEO of BMW Oliver Ziepse shared the alarm on the Union market crisis: at the end of the year we risk a further drop in sales of 1% to 9,6 million units, a 26% in three years compared to the pre-pandemic levels of 2019". Zipse urges governments to help an industry that is racing towards electrification despite adversity many of which have never been seen before: Brexit, the pandemic, the semiconductor crisis and the war in Ukraine with its impact on energy prices and availability.
In this frame accelerates the regionalization of the car market. The United States they are studying rules intended to encourage the sale of cars made in the USA (also owned by European groups). Europe, on the other hand, risks being invaded by a "third wave" arriving from Asia: after Japan and South Korea, the Chinese are arriving.
Al Paris Salon, deserted by the Germans and Detroit big names, it is the houses of Shanghai that dominate the scene. Beijing, strengthened by the advantages of the technological discontinuity of electricity, which has displaced a large part of European know-how, has now established itself as electric leader: 44% of cars powered by volts are produced under the Great Wall, against 19% in Europe and 32% made in the USA.
If you look at sales, i Chinese giants they already boast 19% of the European market. And they won't stop there, strengthened by colossal investments in clean car technology. Numerous subsidies have sprung up Chinese enterprises: Great Wall Motors, Geely (which owns Volvo), BYD, SAIC, Xpeng, FAW, Chang'an, Brilliance, Dongfeng and GAC today China sells twice as many electric cars as in the USA, Europe and Japan combined. Meanwhile, there is a charging station for every three cars, against eight in the rest of the planet.
Cars: Vietnam is also rising on the wave of Asia
Furthermore, the wave of the Far East could soon be strengthened by the arrival of Vietnam: it was presented in Paris Vinfast, car conceived in the Piedmontese ateliers of Pininfarina and Turin Design, and designed to be the future protagonists of the electricity market in the USA and Europe, as well as in Asian countries. In the meantime, the Big Europeans will have to deal with Saic, who bought control of the MG as well as the SUV's Byd (present in the capital Warren Buffett) and of Great Wall.
Just thinking about the Great Wall and BYD Carlos Tavares, Pdg of Stellantis, raised in front of Emmanuel Macron the case of China, problem among the problems of the four-wheeled world. The "dogmatic" decision of the EU to sell only electric cars from 2035 "will have unmanageable social consequences" assures the manager. Now it takes "a layer of pragmatism" to avoid the loss of jobs. A suggestion? The Euro 7 directive on engines, which further lowers emission levels, "must be cancelled, they are useless limits". Furthermore, a policy of incentives must continue in Europe, which includes hybrids, and, above all, attention to Chinese competition.
There is no mention of duties, there is no mention of barriers: "But - Tavares insists - we should forcefully ask Europe for Chinese producers the same conditions with which we, western producers, compete in China”. Stellantis' relations with Beijing have become increasingly tense after the breakup of the joint venture with Gac. This is not the case for German producers, still very strong on the Chinese market today. And from here a doubt arises: won't the buyers of the German plants in Russia come from Beijing?
