European production falls in 9 months 2022
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European production falls in 9 months 2022
- From January to September 2022, production in Europe decreased by 6% compared with the same period of the previous year, while global production increased by 6%. This decline corresponds to around 563,000 less vehicles produced. The decline in production was particularly sharp in Western Europe (Austria, Belgium, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden), where it reached 7.6%, while in Eastern Europe (Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia) it was only 1.4%. In the case of light utility vehicles (LUV), the decline in production was 17.6%, while European passenger car production declined by just under 5%.
- In Eastern Europe, production in Serbia (-66%) and Slovenia (-42%) in particular dropped sharply due to the end of the Fiat 500L (produced in Serbia) and the phasing out of the Smart Forfour (produced in Slovenia). The losses were offset by Romania, which was the only Eastern European country to record an increase (+23%) in production thanks to the production of the Dacia Jogger.
- In Western Europe, production decreased particularly sharply in Finland (-26%), Belgium (-26%) and Portugal (-23%) in the first nine months of 2022. But even major production locations such as Spain (-20%), Italy (-16%) and France (-14%) cannot offer the same production volume as in 2021. Germany is the only country in Western Europe to record a slight increase in production (+4.1%).
- Lower consumer demand, war in Ukraine and loss of several suppliers, problems with the supply of semiconductors, and inflation, which led to a 9.7% drop in demand in Europe in the nine months to 2022, are reasons why only two European countries are recording an increase in production, while production volumes are declining in all other countries.
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Will the former Russian Renault plants be under Chinese control?
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Will the former Russian Renault plants be under Chinese control?
A) Moscow plant (former Avtoframos plant):
The Russian plant in Moscow, left by Renault in April 2022 following the war between Ukraine and Russia that began on February 24, 2022, took only six months to :
The Russian plant in Moscow, left by Renault in April 2022 following the war between Ukraine and Russia that began on February 24, 2022, took only six months to :
1. reach an agreement with a Chinese carmaker to produce a new model at this plant.
2. prepare the factory to produce this new model with the logo of a new brand to be created.
3. To revive the Moskvich brand, stopped in 2001, to name the new model.
4. to market the new model in Russia under the new brand.
5. to plan to sell 50,000 units per year, 10,000 of being battery electric.
B) Togliatti plant (Avtovaz plant):
Under these circumstances, it is quite conceivable that the Togliatti plant, which has stopped Renault production (Logan, Duster, Sandero, Largus) and will one day have to abandon Renault platforms for Lada models, will turn to a Chinese carmaker to rebuild the Lada range and launch new models with platforms and engines of Chinese origin. Inovev had pointed out a few months ago that today there was a real opportunity for a Chinese manufacturer to gain a foothold in Russia, both at Avtovaz (Togliatti) and Avtoframos (Moscow), as Renault had left the country in a hurry.
Under these circumstances, it is quite conceivable that the Togliatti plant, which has stopped Renault production (Logan, Duster, Sandero, Largus) and will one day have to abandon Renault platforms for Lada models, will turn to a Chinese carmaker to rebuild the Lada range and launch new models with platforms and engines of Chinese origin. Inovev had pointed out a few months ago that today there was a real opportunity for a Chinese manufacturer to gain a foothold in Russia, both at Avtovaz (Togliatti) and Avtoframos (Moscow), as Renault had left the country in a hurry.
C) In terms of sales in the Russian market, Chinese car sales already account for 15% of the Russian market in October 2022, up from 10% in the first ten months of 2022, 6.5% in 2021, and 3.5% in 2020. Chinese manufacturers were taking advantage of the market left empty by Europeans to increase their market share in Russia. At this point, this figure nevertheless remains to be put into perspective as the sales volumes of Chinese carmakers in 2022 are down compared to 2021 (50,000 units over 10 months 2022 against 90,000 in 2021).
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Development of MHEV sales in Europe and forecasts
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Development of MHEV sales in Europe and forecasts
- For several years, sales of mild hybrid electric vehicles (MHEVs) in Europe have been increasing in percentage from 10% of the passenger car market in 2020 to 15% in 2021 and to almost 20% in 2022. If we include the light commercial vehicle category, which is still barely influenced by MHEV powertrains, the MHEV sales share rises to almost 13% in 2022, up from 10% in 2021. It should be noted, however, that this percentage increase is not due to an increase in MHEV sales, but to the decline of the market.
- At the same time, battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) sales increase sharply in percentage terms: 11% in 2020 (6% BEV and 5% PHEV), 20% in 2021 (11% BEV and 9% PHEV), and 22% in 2022 (13% BEV and 9% PHEV). Non-rechargeable hybrids (full hybrids) account for a smaller share (4% in 2020, 6% in 2021, and 8% in 2022).
- In opposition, the category losing large market share is purely internal combustion engine cars, which account for 75% of European registrations in 2020, 59% in 2021, and 50% in 2022. As with MHEVs, however, these data for BEVs/PHEVs need to be put into perspective. This is because a significant portion of the increasing share is a result of the shrinking market.
- Will the share of MHEVs continue to rise over the next decade? Due to stricter standards (especially Euro 7), this will probably be the case. However, it is not yet clear by how much, as MHEV vehicles and especially MHEV-48V vehicles are more expensive (but far less than BEVs). What could encourage their development is a products offer from carmakers driven by both the need to fit the new standards and the search for higher profits.
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Global forecast of internal combustion engines in 2035
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Global forecast of internal combustion engines in 2035
Is there a possibility that cars with internal combustion engines will still be sold in large quantities after 2030 or even after 2035?
- It is likely that countries that do not comply with CO2 emission regulations will continue to produce or buy cars with internal combustion engines. For example, the BMW Group announces that half of the cars it will produce in 2030 will have internal combustion engines, which is an interesting indication of its strategy in terms of motorization.
- In which countries will they be marketed? Mainly to countries whose market is not yet mature. In 2021, emerging markets accounted for 25% of global sales, while mature countries (Europe, USA, China, Japan, South Korea) accounted for 75% of global sales, i.e. 3/4 of the 75 million vehicles sold worldwide (cars + trucks).
- Assuming that the global market in 2030 will be roughly the same as in 2021, about 20 million internal combustion vehicles will be sold in 2030 in countries with emerging markets with in addition about 30 million internal combustion vehicles in market mature countries, i.e. about 50 million vehicles.
- In 2035, the volume of internal combustion vehicles is expected to decline by about 20 million vehicles, as a ban on internal combustion engine vehicles will be applied in Europe at that time. If it takes longer than expected for electrification to take hold in mature countries, these volumes will be higher. So it is clear that there is still a future for internal combustion engine vehicles.
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Sales of the Mégane BEV have exceeded those of the Mégane with combustion engine
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Sales of the Mégane BEV have exceeded those of the Mégane with combustion engine
- The battery electric Renault Mégane E-Tech (BEV) was launched in 2021 and came onto the market in January 2022. Although it is in the same segment (C-segment) as the model with internal combustion engine and has a similar length (internal combustion engine: 4.36 m and electric drive: 4.20 m), this model, in addition to being electrified, has some significant differences with the Mégane with internal combustion engine, which was launched in 2016 and continues its career.
- The manufacturer refused to sacrifice the internal combustion engine model when the battery electric Mégane E-Tech was launched, as Smart had done with its Fortwo and Forfour, for example, resulting in a 75% slump in Smart sales.
- This strategy of keeping the old internal combustion engine model alongside the new electric model has recently been applied by Volvo, which continues to market the old XC90 SUV alongside the new EX90 SUV with an electric motor.
- Sales figures reported by the various European statistics agencies show that sales of the old Mégane with an internal combustion engine declined, while sales of the new Mégane with an electric motor increased. In August 2022, sales figures for the new Mégane exceeded those of the old model, and the gap between the two models has widened steadily since then. Cumulative sales of both models are returning to the 2021 level, when only the combustion-engine Mégane was launched.
- In October 2022, European sales of the electric Mégane E-Tech reached 4,500 units, while those of the combustion-engine Mégane did not exceed 3,000 units. According to Inovev, the career of the Mégane with internal combustion engine is expected to continue until demand begins to weaken, starting probably in 2024. The electric Mégane E-Tech would then represent the Renault brand's C-segment sedans alone until its replacement, which is expected in 2028.
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