The arrival of new Chinese brands in Europe
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The arrival of new Chinese brands in Europe
- In a shrinking European car market (estimated at -10% in 2022), Chinese carmakers are expected to double their sales this year (about 80,000 in 2021 and about 150,000 in 2022). They will achieve this mainly through the consolidation of European brands such as Volvo (Geely) and MG (SAIC) and the introduction of new brands previously unknown in Europe such as Aiways, BYD, JAC, NIO, Great Wall, Hongqi, Seres and Xpeng, most of which specialize in electric cars. Some of them were unveiled at the last Paris Motor Show in October 2022.
- BEV-friendly Norway appears to be a scratch line for these various launches. NIO, for example, is building its first European network of battery swap stations there, and Dongfeng is looking to launch its Voyah brand there. The first Voyah brand model announced is the "Free" large SUV, with styling inspired by the Porsche Cayenne and Maserati Levante. The range was reported to be 860 km and battery capacity 88 KWh.
- Geely has already gained a foothold in Europe, buying up Volvo, Polestar, Lotus and LEVC. Its premium car subsidiary Zeekr may appear next year. In addition, its other mid-range subsidiary Geometry has been announced. The first model is a BEV crossover called Geometry C with a battery capacity between 53 and 70 KWh and a range of 400 to 550 km. In the short term, the BEVs Geometry A (sedan, C-segment), Geometry E (SUV, B-segment), G6 and M6 (extended versions of the A and C models) and the M2 (small car, A-segment) will be launched. Geely will initially focus on Central and Eastern Europe.
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Possible consequences of Renault’s reorganization
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Possible consequences of Renault’s reorganization
- The Renault Group, part of the Renault-Nissan Group (Renault, Nissan, Dacia, Mitsubishi, Alpine, Infiniti and Mobilize), announced on 8th November 2022 its reorganization into five business units: Ampère, Power, Alpine, Mobilize and The Future is Neutral.
- Ampère: will focus exclusively on electric vehicles (BEV) and software. The goal is to produce one million BEVs (cars + commercial vehicles) from 2031. This is ambitious, as Inovev's projections are for production of 800,000 BEVs in 2030. The focus is to be on the Hauts-de-France region. Google and Qualcomm are considered potential partners. Nissan's involvement in the project is currently under consideration. For commercial vehicles, the FlexEVan project has been launched as part of Ampère. A partner for the BEV-LUV project is not yet known. It is intended to enable data-based fleet management.
- Power: The core business of the Renault and Dacia brands in the field of combustion and hybrid engines as well as the development of hydrogen engines are to be combined under this name. In addition, a new supplier for up to 5 million engines (combustion engines, hybrid and plug-in hybrid engines) and transmissions is to be created. To this on top, Renault has set up Project Horse, a 50/50 joint venture with Chinese carmaker Geely, with 17 factories and 19,000 employees. It should later be able to act as an independent supplier. It will likely have to do so as both Renault and Geely reduce production of internal combustion and hybrid vehicles in the future and increase production of BEVs. Even without this reduction, Inovev predicts that the two carmakers together will not be able to achieve the targeted volume.
- A zero-emission brand with racing character is to be created under the Alpine brand name. Mobilize focuses on car sharing, mobility services and subscriptions and is a JV with China's Jiangling Motors. The Future is Neutral division aims to become a pioneer in the reuse of materials and recycling of batteries.
- Renault seems to be focusing on the issues and partners of the future and is rebuilding accordingly, setting very athletic goals.
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The share of BEVs in sales by JV and local carmakers in 2022
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The share of BEVs in sales by JV and local carmakers in 2022
- In China, the sales shares of cars with internal combustion engine, electric motor (BEV), plug-in hybrid (PHEV) and non-plug-in hybrid (HEV) differ between local carmakers (Chinese carmakers not affiliated with foreign carmakers) and JV carmakers (Chinese carmakers affiliated with foreign carmakers). For example, the proportion of cars with internal combustion engines in the first nine months of 2022 is 81% for JV carmakers, while it is only 57% for local carmakers.
- Conversely, the proportion of 100% electric cars (BEVs) does not exceed 12% among JV carmakers, while it reaches 30% among local carmakers.
- This means that Chinese carmakers have a significant lead over foreign carmakers in electric cars, and also that Chinese customers are more likely to buy electric cars from local carmakers than from foreign carmakers.
- It should be noted that for this analysis, Inovev included the Wuling brand in the JVs because it is 44% owned by GM and 50% owned by SAIC. Thus, it is not an independent Chinese brand, even though the Chinese share is larger than the U.S. share. If we include Wuling among the local carmakers , the share of BEVs among these local carmakers increases from 30% to 32%.The share of plug-in hybrid vehicles (PHEVs) is also much higher among local Chinese carmakers (12%) than among JV carmakers (1%).
- Conversely, the share of non-rechargeable hybrid cars (HEV) is much higher among JV carmakers (6%) than among local Chinese carmakers (1%).
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The Ford Fiesta will be discontinued in Europe in 2023
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The Ford Fiesta will be discontinued in Europe in 2023
- Martin Sander, President of Ford Europe, announced that the Ford Fiesta (B-segment) will be discontinued at the German site in Cologne in June 2023, as the carmaker intends to focus on the production of 100% electric cars from now on, especially at the Cologne site. This discontinuation of the Fiesta follows the discontinuation of the Galaxy (D-segment) and S-Max (D-segment) in April 2023, as well as the discontinuation of the Mondeo (D-segment), already in April 2022. In addition, Ford recently announced that the Focus (C-segment) will be discontinued in the summer of 2025 at the Saarlouis site.
- This will leave only the Ford Kuga (C-segment) SUVs in Valencia (Spain) and Ford Puma (B-segment) SUVs in Craiova (Romania), both with combustion engines, as well as light commercial vehicles such as the Transit, Transit Custom, Transit Connect and Transit Courier in Europe. However, the carmaker has no plans to disappear from the European market, as he has prepared several new models with 100% electric drive based on Volkswagen (MEB platform for the C/D segment) to be produced in Cologne and Valencia.
- Ford plans to launch three new all-electric passenger cars and four new all-electric light commercial vehicles by 2024, the latter corresponding to the four existing models mentioned above.
- As for passenger cars, there is talk of an electric version of the Puma SUV, as well as two other models that have not yet been announced. It is surprising that Ford has not electrified the Fiesta, Focus and Kuga, instead developing the other two future electric passenger cars on a Volkswagen platform, but the discontinuation of the Fiesta is part of the general policy of European carmakers to expand their product range. Ford aims to sell 600,000 electric vehicles in Europe by 2026 and 1,200,000 vehicles by 2032 - an ambitious target.
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Are Japanese carmakers lagging behind with electric cars?
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Are Japanese carmakers lagging behind with electric cars?
- Are Japanese carmakers lagging behind with their electric cars? This is a question that can be asked if the global 100% electric vehicle (BEV) market grows to 6.8 million units by 2022, up from 4.5 million units in 2021 and 2.0 million units in 2020, and if Japanese electric-drive models today account for only a tiny fraction of BEV sales.
- In fact, only 40,000 Japanese electric vehicles were sold globally in 2021. In 2022, based on figures for the first nine months of the year, Japanese BEV sales will not exceed 50,000 units, which would represent less than 1% of total global sales.
- So it's safe to assume that Japanese carmakers have accumulated a significant BEV backlog compared to European, Chinese and even Korean carmakers, as Hyundai-Kia sold twice as many BEVs in 2021 as all Japanese carmakers combined. And in 2022, the Koreans will sell nearly 350,000 BEVs worldwide, up from 220,000 in 2021. For their part, European carmakers sold 1,000,000 BEVs worldwide in 2021 and 1,300,000 BEVs in 2022. U.S. carmakers sold 1,600,000 BEVs worldwide in 2021 and probably 2,100,000 units in 2022.
- Chinese carmakers sold 1,500,000 BEVs in 2021 and likely nearly 3,000,000 BEVs in 2022. Japanese carmakers are starting to take more interest in the BEV market after hesitant beginnings (Nissan Leaf, Mitsubishi I-Miev, Honda E, Mazda MX30). Toyota is reportedly preparing a dozen electric models and Honda has teamed up with GM Group to launch a full line of electric vehicles, with the Prologue being the first model.
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