New competition: Study: Car manufacturers from Asia drive German corporations away

New competition: Study: Car manufacturers from Asia drive German corporations away

New competition
Study: Car manufacturers from Asia drive German corporations away






The auto industry is in crisis. But an analysis shows that there are problems, especially in Germany and the USA. It is much better elsewhere.

The German car companies are becoming more and more fell behind the competition from Asia. This shows an analysis for which the examination and consulting company EY has evaluated the figures of the 20 leading manufacturers worldwide. While the German corporations lost sales and profits in the first quarter of this year, the new competitors from China were able to make clear ground.

The turnover of the three German car manufacturers took 2.3 percent. Only VW made a slight plus, but BMW and Mercedes slipped significantly. The profit even collapsed in all three, taken together by around a third. The situation was similar with the US manufacturers who, together, lost 2.9 percent sales and also almost a third of the profit.

Things went much better in Asia, especially in China. Manufacturers from the People’s Republic increased by almost 15 percent in sales, and even 66 percent when winning. Above all, BYD and the Volvo mother Geely increased. Manufacturers from Japan and South Korea also beat better than Europeans and Americans. In the end, five of the six most profitable car manufacturers in the world came from Asia. Only BMW still made the leap to third place with 9.3 percent sales return.

Auto industry in the crisis

According to the EY market observer Constantin Gall, a trend reversal is not in sight. On the contrary: the crisis should continue to worsen in the course of the year. “The auto industry has to fight on many fronts, for some established manufacturers the complete business model is at stake,” said the EY expert. “If the profits continue to erode, some manufacturers will ask themselves the question of existence, because competitive pressure in the auto industry is currently brutal.”

The established carmakers – above all the Germans – currently have to deal with a variety of problems: the weak economy brakes the demand, high costs and the slow ride of e -mobility pressed on the result. “In addition, there is the breaking away of the Chinese market, on which local players are increasingly displacing the previous western market leaders,” said Gall.

The new tariffs of 25 percent, which US President Donald Trump has raised at Auto-Import since April, have an intensifying effect. “In the worst case, the threatened high tariffs will result in billions of billions not only among the European, but also among the US manufacturers,” fears Gall. That would drive the returns further down. “The distance from the Chinese manufacturers who are not represented in the United States will continue to increase.”

Several manufacturers and suppliers have already announced savings programs with job cuts in recent months. Volkswagen alone wants to delete every fourth job in Germany by 2030. But it is not enough only with saving, says Gall. “The western car companies have to reinvent themselves completely.” This also includes consistent digitization, more speed in vehicle development and faster decisions.

The manufacturers could learn from the new challengers from the Far East. “The success of the Chinese provider has shown that it is not about simply investing a lot of money,” says Gall. “Speed, flexibility and clearer focus of all investments are at least as important.”

After all: VW can book a respectable success in the first quarter. According to the EY analysis, the Wolfsburgers were extremely thin in front of Toyota, according to the EY-Analysis. In contrast, the Japanese were clearly ahead with sales and operational profit. VW last sold more cars than Toyota in 2019, then had to hand over the position as the world’s largest car manufacturer to the Japanese.

dpa

Source: Stern

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