22/03/21
Lead
This year is probably another year of hopeless growth in the European market.
Author 丨 Kang Qin
Responsible editor 丨 Cui Liwen
Edit 丨 Chic
"The roof leaks in the overnight rain, and the boat is late and the head wind is blowing." This should be a rather apt description of the current state of the European automotive industry.
The emergence and continuation of the Russian-Ukrainian conflict in February has made the production and sales of European automobiles, which are already in trouble due to the epidemic and the shortage of chips, even more stretched.
Total passenger car sales in Eu and EFTA member states and the UK continued to decline 5.4% year-on-year to 804,028 units in February, according to the AECA, the largest EU member states, both of which were the lowest in recent years and the eighth month of consecutive negative growth since the second half of last year.
After a series of declines, the european auto market sold only 1,626,350 vehicles in the first two months of this year, and the year-on-year decline has widened to 4.2%. And as the Conflict between Russia and Ukraine continues to worsen, the normal production of some European car companies has been greatly affected, and the turbulent situation will inevitably lead to a decrease in market demand, so the ongoing March market will become more difficult.
1
The road ahead is bumpy
In fact, not only in March, but also in 2022, the trend of the European auto market will be bumpy.
After nearly a year of continued production cuts or productions due to a shortage of chips, automakers will face more difficulties caused by supply chain problems exacerbated by the Russian-Ukrainian conflict.
Since Russia and Ukraine are both resource countries, providing the automotive industry with a variety of raw materials needed for production, such as neon, nickel, palladium and aluminum, etc., these raw materials are likely to be tight supply or price increases in the future.
Taking neon gas, the key gas of the laser required for the chip, for example, 70% of the world's neon gas is produced in Ukraine. To complicate matters further, the production of Ukrainian neon gas, which is a by-product of Russian steel manufacturing, is purified in Ukraine and then exported. The tension between the two countries could make the already scarce supply of car chips worse.
At the same time, Ukraine is also an important producer of auto parts.
The emergence of conflicts and the continued serious impact on the supply of wiring harnesses in the electrical systems of some European car companies have come from Ukraine, resulting in more or less reduced or even discontinued production in factories such as Volkswagen, Audi, BMW, Mercedes-Benz and Porsche. In addition, the conflict will also have an impact on the transport routes of automobiles and financial transactions, which will exacerbate supply chain shortages and rising costs.
It is also worth noting that Russia and Ukraine are the production bases and important markets of European car companies. According to the VDA of the German Association of the Automotive Industry, in 2021 Germany will export 4,100 vehicles to Ukraine and 35,600 to Russia, accounting for 1.7% of the total German car exports. And last year, German car companies alone produced 170,000 cars in Russia.
It is precisely because of the importance of Russia and Ukraine that although parts suppliers and car companies have tried to reduce the obstacles and losses caused by the conflict by shifting production sites and finding alternative sources, this incident will still have a significant impact on the European automotive industry.
Colin Langan, an auto analyst at Wells Fargo, said european car production cuts in the first and second quarters of this year will reach 700,000 units due to the shutdown of the Ukrainian wire harness factory, although he believes the loss may be made up in the second half of the year.
Bloomberg Intelligence also lowered its forecast for the European market this year, lowering its previous micro-growth of 5 percent to a maximum of flat. Forecasting agency Auto Forecast Solutions also said that due to the shortage of spare parts, especially the impact of the supply of wiring harnesses in Ukraine, the production of cars in Europe will be reduced by 500,000 to 1 million units in the short term.
2
An unavoidable downturn
Returning to the market performance in February, while the entire European market continues to decline, the performance of European countries and car companies is somewhat "polarized".
Taking the five major markets as an example, Italy and France fell by 22.6% and 13.0% respectively, the former mainly due to the end of government subsidies for electric vehicles at the end of last year, and the latter because of the shortage of chips and other supply chains that limited the production of car companies.
Meanwhile, Germany, Spain and the United Kingdom grew by 3.2%, 6.6% and 15.0% respectively. The growth of these three has in common due to the low contrast base of the same period last year, such as the declines in France and the United Kingdom of 38.4% and 35.5% respectively. The latter achieved double-digit growth as February 2021 hit a new low of 51,312 units in The same period since 1951.
Germany, on the other hand, relied more on the new energy market, especially pure electric vehicles increased by 54.9% year-on-year to 28,306 units, providing a new increase of 10,028 units, which completely offset the losses caused by gasoline, diesel and plug-in models.
From the perspective of car companies, Volkswagen Group and Stellantis and Renault Group, as the leaders of the European continent, continue to decline, thanks to the cooperation with Local chip manufacturers in South Korea, as well as the continuous strengthening of hyundai and Kia brand electric models, Hyundai Group once again gained the largest increase of 25.1% among the head companies, and once again surpassed Renault to become the third place in the month. Not only that, after two consecutive months of leadership, Hyundai Group's cumulative sales have led Renault by 13,000 vehicles, and it is becoming increasingly difficult for the latter to return to the top three.
Returning to the list, unlike January, Hyundai was no longer thriving in February, with Toyota, BMW, Mercedes-Benz and Mitsubishi all achieving slight growth, Mazda also had good growth, and Honda increased significantly by 68.3%.
However, it is important to note that these brands have the same reasons for this achievement as in the UK. Taking Honda, the largest increase, for example, a year ago the brand fell 49.1% year-on-year to a low of 3,393 units in the same period in recent years, while the 5,709 units in February this year were only roughly equivalent to last year's monthly average of 5,489 units, which is not at all comparable to the level of nearly 10,000 vehicles before the outbreak, so it is not a very good performance.
It can be seen that whether it is a country or a car company, and whether it is up or down in February, most of them cannot hide the inherently difficult situation. And this may only be the beginning, and then the European car market will face more difficulties and obstacles.
Conchen
Just want to cross the mountains and the sea