Ups and downs of automobile industry

The beginning of the 21st century in the auto industry was marked by the consolidation of capital, and the owners of some traditional Western brands becoming eastern companies. Modern trends in the automotive industry are such that smaller manufacturers who are not specialised in a specific category of vehicles — the most expensive, super sport cars — can hardly survive the battle with auto giants that dominate the world auto-market.
On the other hand, there is major competition among the top two “players” who are fighting for supremacy and title of the world’s largest carmaker.
The start of 2018 marked a controversy about which car giant had delivered the most vehicles in the previous year. According to the official data, the Volkswagen group sold the most cars in the world in 2017, but its Renault-Nissan-Mitsubishi alliance challenged the report arguing that the total number counted by Volkswagen also included heavy truck brands — MAN and Scania. Without these, the title of the world’s largest manufacturer belonged to the French-Japanese company.
While there are controversies around first place producer, it is certain that the third in the world is Toyota, which for years has been number 1 globally.
The fact is, some of the world’s largest carmakers have significantly more brands than others, but in this case, the total number of vehicles sold is counted, irrespective of car brands in one group.
The automotive industry, as one of the most profitable industries, will undergo significant changes in the future and this will greatly contribute to digitisation and ecology. It is already certain that electric cars will increasingly take on the primacy, as evidenced by the fact that Tesla is currently worth more than “Ford” on the market. It is also expected that by 2030 only 5 per cent of cars will be manufactured in Western Europe, while nearly half will be sold in China.
Tesla, the manufacturer of electric cars, set a new record in the first quarter of this year when it sold 25,000 vehicles. This contributed to a rise in its market value, and so, even though it was founded just 14 years ago, is worth more than “Ford”, which has a tradition of 113 years. Subsequently, the value of “Tesla” is estimated at $47 billion while that of the American giant “Ford” is at $45 billion. The reason for this is a decline in the sales of Ford vehicles, which sold 237,000 vehicles in March, an 18,000 fewer than a year earlier. However, Tesla is a much smaller company and its annual revenue in 2016 was about $ 7 billion, while Ford was close to $ 152 billion. But “Tesla” makes cars of the future — vehicles on an electric drive and therefore are worth more. Their target is 50,000 cars in the first half of this year, and a total of 500,000 by the end of 2018.
Monthly sales of “new energy vehicles” — as they are called electric and gasoline-electric cars in China, doubled in April to 82,000, the Chinese Automobile Manufacturers Association said. Monthly data from this association show that car sales in April rose by 11 per cent to 1.9 million, while growth in March was 3.5 per cent.
Among battery manufacturers, Chinese BYD and CATL giants supplying Volkswagen, Ford, and Daimler, rely on the colossal domestic market, especially since Beijing requires manufacturers to use Chinese components. In the world market, CATL would soon reach Japan’s Panasonic.
CATL, which by the year 2020 will increase its production capacity by 5 times, thanks to only one of its large Chinese plants, is preparing to build a new one in Europe.
The US automaker, Ford, plans to invest five billion dollars in the development of electric vehicles by 2022. Ford would start production of electric cars in Germany from 2023 after finishing the Fiesta cycle, said Gunnar Herrmann, head of German business, and suggested that the passage of local and federal authorities support subsidies.
He said it would take about 15 months to adjust the factory to Cologne for this production, adding however that the investment would not be profitable if the sale of electric cars amounted to only 30,000 or 40,000 vehicles a year. This will, in his words, be possible if the number of cars sold increases greatly, since today electric cars are not particularly profitable.
In the next five years, Ford plans to introduce at least 13 electric or hybrid models around the world, and the first fully electric vehicle is scheduled to produce in Europe by 2020. The new German coalition government plans to mitigate tax loads for electric vehicles to ensure at least an additional 100,000 stations to charge electric vehicles throughout the country. It also plans to provide financial support for researching autonomous driving technology, as well as support for the launch of battery production.
Recently, Daimler announced an estimate in terms of the expected earnings rate in the electric vehicle segment and about half of the profits earned by conventional models. Sergio Marcione emphasised that the giant FCA Group loses large amounts of money on every product and sold Fiat 500 car model, it is an electric variant of a retro car.
Consultants estimated the amount of announced manufacturers’ investments in electric vehicles at $61billion for the development of autonomous driving technology. All available research shows that customers are not interested in self-driving cars.
On the other hand, it is predicted that customers will pay an extra $ 2,300 for autonomous driving cars in the future, and the current development of these systems when converted per individual vehicle, is about $ 23,000.

Stefano Virgilli