Will Dongfeng finally open a factory in Italy?
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Will Dongfeng finally open a factory in Italy?
- Following Italy's vote in favour of an additional tax on battery electric vehicles imported from China, the Chinese carmaker Dongfeng, which had planned to build an assembly plant in Italy to produce its own models, according to an agreement signed in early August 2024 with the Italian government, has just announced that it is reconsidering this project, probably due the slower than expected development of the electric vehicle market in Europe but perhaps also following Italy's vote in favour of the European Union's additional tax system.
- If this project is cancelled, it would be damaging for the Italian automobile industry, which needs to revive production on its soil. Several hundred thousand vehicles could be produced locally, in addition to the 800,000 produced annually today (mainly by Stellantis).
- Given that Chinese vehicles produced in Europe are not subject to the additional taxes, this decision appears to be an additional weight in favour of the Chinese in the balance of negotiations between the European Union and China.
- The possible questioning of this factory could allow Dongfeng to consider another more accommodating European country, such as Germany, Hungary, the Czech Republic or Slovakia, these countries having voted against the additional taxes proposed by the European Union. At the same time, Dongfeng's position is part of a context in which the Chinese government has more generally asked to reconsider the positions of Chinese carmaker s and European governments on new projects. It is still unknown whether this directive could affect projects already well advanced such as BYD in Hungary, Chery in Spain or even Leapmotor in Poland.
Nissan to cut global production capacity by 20%
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Nissan to cut global production capacity by 20%
- Japanese carmaker Nissan, which has regained some autonomy since Renault's stake in its capital was reduced, has announced that it will cut 9,000 jobs worldwide, accompanied by a 20% reduction in its production capacity. However, last April, Nissan announced that it wanted to sell 4.5 million vehicles worldwide in the 2026/2027 financial year*, compared to 3.2 million in 2022 and 3.3 million in 2023. The 2023/2024 financial year (Japanese fiscal year = from March year n to March year n+1) was extremely poor, with a 7.8% drop in Nissan's production compared to the previous financial year and the situation is even worse in September 2024, with a 9.8% drop.
- Production in Japan was the most affected, with a 13.4% drop compared to last year (-11.8% in September 2024), compared to a 6.4% drop for factories located abroad (-9.3% in September 2024). The carmaker does not expect any improvement in the short term. As a result, Nissan announced that it would once again reduce its production capacity by 20%, which will go from 5.6 million vehicles per year to 4.5 million (compared to 7 million vehicles in 2017/2018). To stay afloat, Nissan will sell 10% of its shares in Mitsubishi Motors, reducing its stake to 24% compared to 34% previously.
- Nissan's difficulties can be explained in part by the constant lack of success of its models and the serious decline observed in China (-15% of sales over 9 months of 2024). We can also wonder about the fact that Nissan, which had been one of the pioneers of the electric vehicle with the Leaf, then let all its competitors take the advantage without any reaction on its part. Inovev believes that the production capacities that will fall to 4.5 million vehicles per year are still too high compared to the situation of the carmaker. It would be appropriate to reduce them again by 20% to set them at 3.6 million vehicles per year, a level that would seem more realistic.
Germany has regained its position as Europe's leading BEV market
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Germany has regained its position as Europe's leading BEV market
- Even if Germany had fallen behind the United Kingdom in the European market for battery electric vehicles in the first quarter of 2024 (following the end of subsidies granted by the German government on the purchase of battery electric vehicles), this country regained its leading position over the first 9 months of 2024, with 276,390 units (down 28.6% compared to the first 9 months of 2023) ahead of the United Kingdom (269,931 units, +13.2 %) and France (216,841 units, +6%).
- However, BEVs represent only 13% of the German market in the first 9 months of 2024, compared to 18% in the first 9 months of 2023, while in the United Kingdom they now represent 18% of the market and 17% In France.
- All European countries combined, BEVs represent 14.7% of the European market over the first 9 months of 2024, compared to 15.2% over the first 9 months of 2023, with a volume of 1,433,225 units compared to 1,472,190 units respectively.
- In terms of market share, Germany, the United Kingdom and France, the three countries which buy the most of BEVs in Europe, remain in the middle of the pack, far behind the Scandinavian countries, first and foremost Norway (88% of market share) followed by Denmark (48%), Sweden (34%) and Finland (28%).
- We also note the good performance of the Benelux countries (Belgium, Netherlands, Luxembourg) with BEV market shares of 27% to 32% depending on the country. Finally, Switzerland (19%) and Portugal (18%) do better than the United Kingdom or France. The countries located in Eastern Europe and Southern Europe remain the least favored (less than 7.5% BEV in these markets).
Audi will stop production in Brussels at the end of February 2025
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Audi will stop production in Brussels at the end of February 2025
- The Audi assembly plant in Brussels Forest (Belgium), which is a former Volkswagen factory, is one of the only two survivors (along with the Volvo assembly plant in Ghent) of the formerly flourishing Belgian automobile industry. At the end of the 20th century, Belgium had a Ford factory, an Opel factory, a Renault factory, a Volkswagen factory and other small factories. The Volkswagen Brussels Forest factory produced Volkswagen Lupo, Polo and Golf until 2009, then it produced Audi A1 and A3 until 2018, then finally Audi E-Tron from 2019, renamed Q8 E- Tron in 2022.
- These expensive vehicles did not predispose to a high production volume. This is why the production volume of the Brussels Forest factory did not exceed 51,546 units in 2022, compared to 131,226 in 2012 and 204,402 in 2005. The drop in sales of electric vehicles in Germany (-28,6% over the first 9 months of 2024) due to the end of subsidies handicapped the distribution of the Audi Q8 E-Tron whose sales fell by 36.5% in 2024 (Germany being its first market in 2023 and second in 2024, behind the USA).
- What was a possible hypothesis has therefore become a reality. Audi has just confirmed that it will end production of its Q8 E-Tron model at the Brussels Forest site, effective February 28, 2025.
- Production of this vehicle will be transferred to the Mexican plant in San Jose Chiapa where the Audi Q5 is already assembled for the whole world. This decision implies the permanent closure of the Brussels Forest factory, unless another carmaker wishes to set up there or even another company belonging to a completely different sector.
Towards a recovery of the European BEV market?
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Towards a recovery of the European BEV market?
- Is the European BEV automotive market recovering? While the European market (31 countries) for battery electric vehicles (BEV) grew by 3.5% in the first quarter of 2024 compared to the first quarter of 2023, then by 1.6% in the first half of 2024 compared to first half of 2023, it fell by 2.6% over the entire first 9 months of 2024 compared to the first 9 months of 2023. But in September 2024, it increases by 13.9%.
- This means that the evolution of BEV sales over the first 9 months of 2024 is generally negative compared to 2023, the BEV market share having fallen to 14.7% in Europe at the end of September 2024 compared to 15.2 % at the end of September 2023. But the increase observed in September suggests a recovery over the next three months of the year.
- We are therefore not witnessing a collapse in BEV sales in Europe, but a stagnation or even a decline in sales in certain countries such as Germany (-28.6%), Sweden (-18.9%), Finland (-31.4%) or Switzerland (-9.5%). The new battery electric models at a lower prices than today may help to support the European electric market.
- As for other engines, gasoline continues to lose ground in Europe (34% of the market against 37% in 2023 and 38% in 2022), like diesel (11% of the market against 12% in 2023 and 15 % in 2022). The plug-in hybrid remains stable at 7% of the market. The full- hybrid (or FHEV) continues its spectacular growth (14% of the market compared to 10% in 2023 and 8% in 2022). The micro-hybrid (MHEV) is growing at 17% of the market and remains the second technology in terms of engine behind gasoline engines which are twice as large in terms of market share.
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