Algeria re-allows car imports
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Algeria re-allows car imports
In 2016, the Algerian government decided to severely limit imports of vehicles from abroad in order to encourage the manufacture of cars in Algeria and gradually benefit from technology transfer. Three years after this decision, the Algerian government is moving backwards, by again allowing imports of vehicles from abroad.So what happened during these three years?
1. The Algerian market has collapsed. It has increased from 265,000 units in 2015 to 97,000 in 2016 and 94,000 in 2017. In 2018, it rose to 127,000 units, but this is half as much as in 2015 and three times less than in 2012.
2. The target of producing 250,000 vehicles in Algeria in 2018 was not achieved at all, as the production volume did not exceed 70,597 units last year.
3. Of the 70,597 vehicles assembled in Algeria in 2018 (60,606 in 2017), 68,196 are Renault vehicles (nearly 97% of the total). The other brands that have decided to set up in the country seem to be experiencing difficulties in starting their business.
4. This quasi-monopoly has raised the price of new locally assembled cars, and above all this price is higher than that of cars in the same category that were previously imported.
5. Technology transfer has not occurred, as Algerian factories import CKD cars whose integration rate remains insignificant.
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BMW started up its Mexican plant last month
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BMW started up its Mexican plant last month
- The German automaker BMW started operating at its new Mexican plant in San Luis Potosi, in central Mexico, last month. This plant began manufacturing the recent 3 Series sedan for the entire North American market. It sold up to 150,000 units of this model in North America in 2007, but since then the 3 Series has suffered from the success of the SUVs, the success of the 5 Series sedan, the success of its main competitor the Mercedes C-Class and finally the separation of the coupés and convertibles now called 4 Series. However, BMW believes in the potential of this model in this region and has modelled its strategy on that of Mercedes, which decided in 2014 to produce the C-Class sedan sold in North America on site. Since then, the Mercedes C-Class has been produced in the United States at 60,000 / 70,000 units per year for local demand.
- BMW plans to produce 75,000 units per year of its 3 Series in its new San Luis Potosi plant. This will produce an equivalent Series 5 volume starting next year. The plant is calibrated to produce up to 175,000 units per year.
- BMW's strategy is part of a major redeployment of German automakers in North America. Audi, Mercedes and even Volkswagen have recently increased their industrial activity in this region in order to meet local demand directly without having to rely on exports from Europe. In addition to the Mercedes C-Class, the Audi Q5, Volkswagen Tiguan and now the BMW 3 Series are produced in North America.
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The stop of production of the Opel Adam will initiate a game of musical chairs
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The stop of production of the Opel Adam will initiate a game of musical chairs
- The discontinuation of production of the Opel Adam (segment A sedan) at the Eisenach site (Germany) in May 2019 will result in a series of changes at PSA plants in Europe. Indeed, the Opel Grandland (C-segment SUV), previously manufactured at the Sochaux site (France), will replace the Adam on the assembly lines at the Eisenach site. At the same time, the Opel Grandland will be replaced on the assembly lines at the Sochaux site by the Peugeot 5008 (Dsegment SUV), half of which will then be produced in Sochaux, and half in Rennes (where it is currently produced in its entirety).
- The transfer of part of the Peugeot 5008 from Rennes to Sochaux will enable the Citroën C5 Aircross (C segment SUV) to reach its maximum production rate. It should be recalled that the production capacity of the Rennes site is currently 150,000 vehicles per year, that of the Eisenach site 200,000 units per year and that of the Sochaux site 500,000 units per year.
- PSA has announced new changes for 2020-2021. Thus, the next generation of the Peugeot 2008 should be transferred from Mulhouse to Poissy or Vigo in 2020, the next generation of the Peugeot 308 should be transferred from Sochaux to Mulhouse in 2021, the next generation of the Peugeot 301 and Citroën C-Elysée should be transferred from Vigo to Kenitra in 2019, the next generation of the Opel Mokka should be transferred from Zaragoza to Poissy in 2020, the next generation of the Citroën C4 should be transferred from Mulhouse to Villaverde in 2020 and some of the Opel Astra should be transferred from Ellesmere Port to Rüsselsheim in 2021.
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Read more... The stop of production of the Opel Adam will initiate a game of musical chairs
Suzuki's future remains uncertain
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Suzuki's future remains uncertain
- Suzuki is now the world's tenth largest automaker (3.43 million vehicles sold in 2018) with more than half of its sales in India, where it is by far the market leader. Nevertheless, several weaknesses appear for the development of the Japanese brand in the coming years.
- First, Suzuki has withdrawn from the two largest markets in the world, the US market in 2013, and the Chinese market in 2019. Suzuki is therefore becoming more of a local than an international manufacturer. It is mainly present in India, Japan and South-East Asia.
- Secondly, Suzuki has never been successful in higher categories, such as C, D or E segment sedans and SUVs, or minivans. The Japanese brand is definitively doomed to focus on A and B segment sedans and SUVs. However, this market is likely to shrink in the coming years and could be limited to car-sharing structures.
- Third, Suzuki is not prepared for the announced development of sales of electric vehicles worldwide, let alone autonomous vehicles. Yet the automotive world will undergo a huge upheaval in the long term with the massive arrival of electric cars, then autonomous cars.
- Suzuki does not have the means to finance such a change, which is why the still independent Japanese brand will have to get closer and closer to its recent partner Toyota in order to survive and grow.
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Possible reassessment of the agreements between Renault-Nissan and Daimler
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Possible reassessment of the agreements between Renault-Nissan and Daimler
- The acquisition of a 9.7% stake in the German group Daimler by the Chinese group Geely, and the resulting agreement on the future of the Smart brand (whose production will be transferred to China from 2022) could call into question the agreements between the Renault-Nissan and Daimler groups. This subject has already been raised within the new Daimler Group management (Mr Ola Kallenius who has just replaced Mr Dieter Zetsche).
- First, the agreement on the joint design of Renault Twingo and Smart Forfour will lapse when production of Smart cars in Europe stops in 2021. Renault will have to design the Twingo's replacement on its own, if it is maintained.
- Secondly, the agreement on the joint design of the Infiniti and Mercedes C-segment will be stopped in 2019, with the final shutdown of production of the Infiniti Q30/QX30 in Great Britain.
- Thirdly, it is not certain that the Mercedes Citan and X-Class SUVs currently derived from Renault-Nissan models will be replaced, as sales of these models do not meet the targets set.
- Fourthly, it is not certain that Renault original 1.5 and 1.6 diesel engines will continue to be used on some Mercedes models, given the continuing drop in sales of diesel cars of all brands throughout Europe.
- Fifthly, the Nissan-Mercedes joint plant in Mexico has still not produced a single Mercedes model.
- Finally, Daimler's management has stated that it now wants to strengthen its collaboration with its competitor BMW.
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Read more... Possible reassessment of the agreements between Renault-Nissan and Daimler
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