China's production capacity has reached 37 million vehicles per year in 2014

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China's production capacity has reached 37 million vehicles per year in 2014

- Whereas Europe (including Russia, Ukraine and Turkey) currently has a production capacity of 27.4 million units (PC + LUV), China currently has a production capacity of 37.4 million, i.e 10 million more.

- In 2014 Europe will register a utilisation rate of its plants of about 70%, while the average rate should really exceed 80% to be efficient.

- China has an even lower rate, since it did not exceeded 60% in 2013 and will not exceed 65% in 2014, given a production volume that should increase by about 2 million units this year.

- The main difference between these two regions is in fact the expected increase  in annual car production. While Europe is meant to have an average annual increase of about 3% until 2018 (500 000 additional units per year), China should have an average annual increase three times higher, of about 9% per year until 2018 (ie 2 million units per year).

- With such a development and stagnating production capacities, China would have a utilisation rate of its factories of around 70% in 2015, 75% in 2016, 80% in 2017 and 85% in 2018. But this scenario is not the most likely since China is constantly building new production capacities (2 million more before 2017).

 

 

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European LUV sales by country in 2013

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European LUV sales by country in 2013

- European LUV sales by country in 2013 ranked France as the market leader with 365 000 units sold, ahead of Great Britain (271 000 units), Germany (213 000 units) and Italy (101 000 units). Together these four countries account for two thirds of all LUV registrations inside the European Union.

- France is generally in the first place in Europe due to the success of passenger cars converted into light utility vehicles (like the Renault Clio, Peugeot 208 and Citroën C3 ), this segment is called segment N and is not found in other countries or very rarely (Spain, Italy). Segment N are created from PC vehicles with back seats removed in order to create a larger trunk space.

- In 2013, N segment vehicles represented 72 000 sales in France, including 34 000 Renault vehicles , 22 000 Peugeot and 16 000 Citroën. Renault and PSA are also the leaders of the LUV market in Europe and have a local market very receptive to Kangoo, Berlingo and Partner vehicles . This is one main feature of the French LUV market.

- The European LUV market which fell by 28% in 2009 rebooted in 2010 (+8.9%) and 2011 (+6.7%). But fell again in 2012 (-12.9%). In 2013, this market remained stable (-0.4%). As a result, the volume of sales in 2013 is almost the same as in 2009. Since the beginning of 2014, the market has recovered substantially which suggests an increase of nearly 10% over the year (+9.3% in the first four months).

 

14-20-2  


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The Korean market is more and more open to imports

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The Korean market is more and more open to imports

- In the first 4 months of 2014, five Korean manufacturers (Hyundai, Kia, GM Korea, Renault Samsung and SsangYong) sold 382 000 vehicles in their local market, an increase of 6.1% compared to the same period in 2013.

- By category, sales of large cars (segments E and F) increased by 64% (to 20 000 units), sales of SUVs rose by 27% (106 000 units) and sales of urban vehicles (segments A and B) rose by 6% (to 63 000 units). In contrast, sales of compact cars (segment C) and medium size sedans (segment D) decreased in the first four months of the year (to 193 000 units), but still remain the most popular cars with Korean customers.

- Moreover, it is interesting to note that sales of imported cars in South Korea continue to take market share from Korean manufacturers. Totalled 17 000 units in April (+25%), bringing the sales volume for the first four months of the year to 61 000 units, representing an increase of nearly 27%, an increase four times higher than the one experienced by the Korean market as a whole.

- BMW was the best-selling foreign brand over the four months (13 698 units) , followed by Mercedes (11 256 units), Volkswagen (9 668 units), Audi (8 761 units). 80% of imported cars sold were European , most of which were German. 13% were represented by Japanese brands and 7% were American brands.

 

14-19-10  


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New model transfer project for PSA

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New model transfer project for PSA

- The announcement of the arrival of premium models to the PSA Mulhouse plant (probably DS models from segments C and D) will result in more model transfers within the group's French plants .


- The planned concentration of high end models from segments C and D in Mulhouse (France) may lead to the transfer of the 508 from Rennes to Mulhouse (the transfer of the C5 has already been confirmed and it is to be renamed DS6) alongside the transfer of the 2008 from Mulhouse to Poissy. The next plant in which  the C4 will be manufactured is still to be determined. Currently produced in Mulhouse, the C4 may have to join the 308 in  Sochaux, if this was the case the 3008, 5008 and Zafira could be transferred to the Rennes plant, which would become a plant dedicated to crossovers.


-Below you will find a summary of the model transfers between PSA plants, as well as Inovev’s forecasted transfers.

 

 

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Consequences of the Chevrolet withdrawal from the European market

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Consequences of the Chevrolet withdrawal from the European market

- The decision to withdraw the Chevrolet brand from the European market in 2015-2016 (in order to boost sales of the Opel brand on this continent, Opel and Chevrolet both being part of  the General-Motors group) will inevitably lead to lower production rates in the GM Korea plant, this plant provides most Chevrolet models sold in Europe. In 2013, 130 000 Chevrolet vehicles were sold in Europe (excluding Russia, Ukraine and Turkey), against 162 000 in 2012 and 173 000 in 2011. The peak was reached in 2007 with 205 000 sales. GM Korea produced 745 000 vehicles in 2013 (against 768 000 in 2012 and 789 000 in 2011). These figures do not include CKD vehicles delivered to some countries of the former Soviet Union, such as Ukraine and Uzbekistan.


- The pattern of Chevrolet sales in Europe and production levels of the GM Korea plant are therefor following the same trend. With the removal of the 130 000 European sales expected for 2014 and 2015 GM Korea's production will undoubtedly  fall accordingly  over the next two years.


- This phenomenon will be amplified by the production transfer of the Opel Mokka from Korea to Spain (in the second half of 2014), probably 40 000 units in 2014 and 80 000 units in 2015 and beyond. GM Korea will therefore lose the production of 170 000 vehicles in 2014 and 210 000 in 2015, which will lead to a reduction of its capacity.

 

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  1. Comparison between France and Sichuan/Chongqing
  2. 2013 Sales by body type
  3. The new Audi product plan (2014-2019) revealed
  4. The new DS product plan (2014-2018) revealed
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