The arrival of Chinese models in Europe could materialize with BEVs
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The arrival of Chinese models in Europe could materialize with BEVs
- At the beginning of the 2000s a few number of Chinese carmakers attempted to market products in Europe (notably Landwind, Brilliance) but these attempts were unsuccessful. Geely had another strategy (and opportunity): the takeover of a European carmaker in 2010 (Volvo) which quickly enabled Geely to acquire the technologies developed by an established carmaker but also to better understand the European market.
- But the priority for Chinese carmakers is above all to supply their fast-growing national market before focusing on the European market (growth interrupted since 2018 should resume from 2021). The market share of Chinese carmakers in China is still low (it does not exceed 35%) and they can therefore further strengthen their presence in this market. For this, the Chinese government is strongly pushing for a greater concentration of the Chinese automobile industry to create carmakers with the capacity to meet the challenges of today and of the future (electrification, ADAS ...).
- In Europe, however, the presence of Chinese electric vehicles is already a reality. MG (former English brand) is trying to penetrate the European market with a low-cost B-segment electric SUV (10,000 sales per year). Also, the future Electric Smart and Electric Dacia produced in China will be exported to Europe. The electric car market in Europe is emerging, and potentially more easily penetrated than the combustion engine market, especially for low-cost vehicles.
- The switch from the European A-segment from thermal to electric (therefore more expensive) could create an opportunity for Chinese carmakers to establish themselves in this segment, with electric vehicles that are cheaper than European electric vehicles. China has indeed become an expert in 100% electric vehicles at low prices (at least locally). Inovev has analysed and compared the prices of electric vehicles sold in China and in Europe. The results of this analysis will be available soon in a specific study.
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Can we expect future carmakers merging?
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Can we expect future carmakers merging?
- According to Inovev, global automobile production lost 15.5 million of passenger cars (PCs) and utility vehicles (UVs) in the first seven months of 2020, compared to the same period of 2019, broken down into 11.2 million passenger cars and 4.3 million utility vehicles. Over the year 2020 as a whole, this loss in produced vehicles could ultimately approach 20 million.
- In these special conditions, it is likely that some carmakers will seek to accelerate the creation of new alliances or new partnerships in order to limit their production costs and compensate the loss of such a large quantity of vehicles. Especially as the investments for technological transformations (electrification, ADAS,...) are still necessary.
- Already, before the Covid-19 crisis, several alliances had been announced, such as that of PSA with FCA, or that of Volkswagen with Ford. New alliances are expected, notably Toyota's with Suzuki already vaguely sketched out, and others still unknown to this day.
- More recently GM and Honda have joined forces to develop common platforms for the American market. The future of Tata Motors and its Jaguar and Land Rover subsidiaries hit hard by the Covid-19 crisis and Brexit is about to be redefined. In China, the regrouping of brands could accelerate to give birth to large international groups capable of competing with Volkswagen, Toyota or Renault-Nissan.
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Jaguar Land Rover experiences the biggest crisis in its history
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Jaguar Land Rover experiences the biggest crisis in its history
- The British Premium brands Jaguar and Land Rover were sold by Ford to the Tata Motors in 2008. The Indian carmaker managed these two luxury brands well until 2017, as the production of the two brands rose from 255,000 units in 2008 to 501,000 in 2015, doubling the audience in seven years. The peak of production was reached in 2017, with more than 600,000 units produced and the announcement of the opening of a new plant in Slovakia. The situation began to deteriorate from 2018, with production falling to 578,000 units and then 545,000 in 2019. In 2020, the situation declined significantly, with both the consequences of the Covid-19 crisis and fears about a future no-deal Brexit, but also due to a product range which didn’t meet the market demand (especially for Jaguar).
- Production fell to 190,000 units in the first seven months of 2020, a drop of nearly 40% from the first seven months of 2019, a much larger drop than other carmakers, which are experiencing declines between 25% and 30%, the average for all carmakers being equal to 29%.
- The situation is more catastrophic for Jaguar (-51% compared to 2019) than for Land Rover (-34%), in particular because Jaguar sedans no longer have audiences. The XE (segment D) crumbles by 70% and the XF (segment E) by 85% ... As for the XJ (segment F), it has disappeared from the product range. The Jaguar brand is so vulnerable that it may disappear at the end.
- One of the viable solutions for a renaissance would be the cession of Jaguar to another carmaker who would have the capacity to rebuild a whole new range of attractive sedans, as the Jaguar MK II and XJ6 had been in the 1960s and 1970s.
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Are compact MPVs going to disappear in Europe?
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Are compact MPVs going to disappear in Europe?
- We saw in a recent analysis that D & E segments MPVs are on the way out. This is somewhat what is likely to happen with C-segment MPVs (compact MPVs) as well. Their market share in Europe fell from 10% in 2005 to 6% in 2014 and 2% in 2020. At this level, there will no longer be a compact MPV marketed in Europe in two or three years. In the USA, compact MPVs are non-existent. In China, they catch a relatively modest market share.
- When we look at the product plan of carmakers located in Europe, we see that Renault (pioneer and promoter of the compact MPV) has announced the non-replacement of its Scenic MPV which should be discontinued in 2023. Citroën will not replace its C4 Space Tourer (ex-Picasso). Volkswagen will not replace its Touran at the end of its product life. Ford discontinued its C-Max last year. Opel has abandoned the Zafira, which is the heir to a long line of success. Toyota stopped its Verso and Kia did with its Carens in 2019. The Dacia Lodgy seems condemned for lack of success.
- Paradoxically, two Premium models remain, the Mercedes Classe B and the BMW Active Tourer, which continue their career, despite relatively modest volumes. The B-Class has just been renewed and the Active Tourer will be renewed next year. SUVs therefore seem to have killed the compact MPVs of generalist carmakers, but not those of Premium carmakers. Perhaps having entered this specific market later will help premium carmakers to get a (temporary?) market for their compact MPVs.
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Renault Zoe will probably reach 100,000 sales in 2020
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Renault Zoe will probably reach 100,000 sales in 2020
- Initially planned to be produced at 150,000 units per year by the former management of Renault, the Zoé will probably reach 100,000 units for the first time in 2020.
- The signs that allow this forecast to be advanced are linked to the demand recorded on this model during the first seven months of 2020. Sales of the Zoé have indeed totalled 46,511 units over this period and the monthly trend in June and in July is 10,000 units per month, which means that at the current rate, the Zoe could reach 100,000 units over the whole year.
- Everything will depend on the demand observed between August and December 2020, but given that the demand for electric cars is increasing, supported in particular by subsidies or taxes reduction in various European countries, and that the first half of 2020 was weighed down by two months of lock-down, we can assume that Zoe's sales during the second half of the year will be higher than those of the first half.
- The Renault Zoé is one of the ten best sellers in France for the first time in its history. It also became the best-selling electric car in Europe, ahead of the Tesla Model 3, in the first seven months of 2020.
- It sells for twice as much as the Volkswagen e-Golf and three times as much as the Nissan Leaf, Hyundai Kona EV or Peugeot 208 EV, which means it is far ahead from its European competitors. Regarding the Tesla Model 3, the situation is more complicated because this model evolves on the European market by cycle.
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Read more... Renault Zoe will probably reach 100,000 sales in 2020
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