Introduction: The oil crisis has triggered great changes in the global automobile industry and reshaped the competitive landscape of global car companies.
(Text/Yu Waijun Editor/Lou Bing) With the tensions between Russia and Ukraine, international oil prices have begun to soar, even approaching $140 a barrel at one point, the highest record since 2008. At the same time, the domestic refined oil price has also ushered in many upward adjustments, directly from the 7 yuan era to the 9 yuan era.
Against this backdrop, the term "oil crisis" has recently been frequently mentioned in the media. As the mother of bulk and the "blood of industry", oil has penetrated into all aspects of our lives. Once the oil crisis breaks out, it will have a significant impact on the global economic development, and the automotive industry, which is closely related to it, may bear the brunt of it.
In fact, between the 1970s and the 1990s, there were three oil crises due to wars and conflicts, which had a profound impact on the development of the global automotive industry. In particular, the outbreak of the first oil crisis led to great changes in the pattern of the world automobile industry.
Reshape the development pattern of global car companies
Before the outbreak of the first oil crisis, the U.S. auto industry ushered in a period of rapid development for a long time. Among them, the 1940s and early 1970s were known as the golden age of automobile development in the United States. During this period, because the price of oil is very low, American car companies have hardly considered the issues related to fuel consumption when designing automotive products, and how to launch new models with larger size, more power and more stylish appearance is the focus of their concern.
At this point, large-size, large-displacement American muscle cars occupy the mainstream of the U.S. automotive market. At the same time, U.S. automakers such as Ford, General Motors, and Chrysler firmly occupy almost the entire U.S. automotive market, and the market share of the three giants changes by almost 1% every year.
However, with the outbreak of the Fourth Middle East War, the golden age of American automobiles came to an end. In October 1973, Egypt and Syria launched separate raids on israel to regain land encroached upon by Israel. Although it ended in Israel's victory, the Arab countries behind Egypt and Syria retaliated against the supporting United States and Europe for using oil as a weapon, and began to implement measures such as cutting production and imposing oil embargoes against countries such as the United States, Canada, Japan, the Netherlands and the United Kingdom. This nearly quadrupled the world average price of oil, and the oil crisis was pushed to the extreme, which lasted until 1975.
With the full-blown outbreak of the first oil crisis, the global automotive industry has been greatly impacted. Data show that during the first oil crisis, global automobile production fell from 39.92 million units to 33 million units, a decline of 17.3%. In addition to affecting global automobile production, the oil crisis has also had a huge impact on the pattern of the global automobile market. Among them, the auto markets in Europe and Japan have been less affected by the development of small and compact economic models because car companies have been developing, and the impact of the US auto market and US car companies is particularly obvious.
Under the impact of this oil crisis, U.S. oil prices have soared, which has led to the large-size, large-displacement luxury cars that were previously favored by American consumers have become almost unpopular. The data shows that between 1973 and 1975, the price of crude oil increased from $3.29/barrel to $11.58/barrel, an increase of more than 250%.
The rapid rise in oil prices has directly led to a sharp decline in sales in the US auto market. In 1974 and 1975, U.S. auto sales fell by 20.8 percent and 3.8 percent, respectively. In addition, between 1978 and 1980, the second oil crisis broke out, completely crushing the pursuit of full-size, large-displacement luxury cars by American car companies and the US auto market.
In addition to the oil crisis, the Clean Air Act, amended in 1970, and the CAFE, Corporate Average Fuel Economy, introduced in 1975, also had a significant impact on the U.S. auto industry in terms of emissions and fuel economy.
Among them, the Clean Air Act stipulates that the CO (carbon monoxide) and HC (hydrocarbon) levels emitted by cars produced in 1975 and later should be one-tenth of the standard at that time, and the NOX (nitrogen oxide) level of vehicles produced in 1976 and later should also be one-tenth of the standard at that time. CAFE requires that the fuel consumption of cars and light pickup trucks with a total weight of less than 8500 pounds (3855 kg) sold in the US car market reached 18 mpg (miles without gallons) in 1978, that is, 13 liters of gasoline per 100 kilometers; in 1985, the fuel consumption was 27.5 mpg, that is, 8.5 liters of fuel consumption per 100 kilometers.
The introduction of these two policy bills hit the US auto industry almost unprecedentedly at that time. In response to the oil crisis and stringent vehicle emissions and fuel consumption regulations, U.S. automakers have had to invest heavily in the development of small and compact cars, fuel-efficient engines, and rebuild factory production lines. These changes cannot be completed quickly and take a long time to change manufacturing tools and production processes.
In order to adapt to market changes, GM borrowed $600 million in 1975 alone to renovate production lines, which set a record for the highest loan for a single industrial enterprise at that time. Since then, in order to realize the shift in production capacity to compact and micro cars, GM has embarked on the largest capital expenditure in history.
Between 1977 and 1980, GM invested $21.4 billion globally in the retrofitting of plants and equipment to meet changes in the production of small cars and fuel economy. A large number of capital expenditures have caused General Motors' profits to shrink significantly. By 1980, GM was losing its first loss since 1921. It should be emphasized that the transformation of General Motors is only a microcosm of the transformation of American automakers and the entire U.S. auto market.
However, due to the lack of research and development experience in small cars and small displacement engines, American car companies have made slow progress in developing economic cars. At the same time, some immature technologies have been applied to new models, making the cars produced by American car companies frequently have quality problems. At this time, Japanese cars, which were once considered unsuitable for the U.S. auto market, took advantage of the momentum to enter the U.S. market. With good product quality, stable and reliable products and excellent fuel economy, Japanese cars have quickly gained the favor of American consumers and dealers.
The market battle between the United States and Japanese car companies
Along with this, the share of American cars in the U.S. auto market continues to decline, while the market share of Japanese cars is rising rapidly, and the U.S. auto market has become the main overseas auto export market for Japanese auto companies. According to the data, Japanese cars accounted for only 3.7% of the U.S. auto market in 1970, and this figure rose to 18.6% by 1981. Among them, Japanese car companies exported 4.5 million vehicles in 1979, while the U.S. auto market reached about 2 million.
In the face of the large-scale attack of Japanese car companies, the US car companies have gradually entered difficulties and suffered losses due to the decline in market share and the influence of multiple factors such as external factors. Among them, Chrysler lost money for three consecutive years, losing $200 million in 1978, expanding to $1.1 billion in 1979, and losing $1.7 billion in 1980. Ford turned from profit to loss in 1979, with a loss of $1 billion, and by 1980 the loss increased to $1.5 billion. GM lost its first $763 million in 1980 due to its good sales in the European market, although it did not lose the first two.
In fact, in order to curb the fierce offensive of Japanese cars, the Us domestic car companies have also made counterattacks, but the counterattack measures have had little effect. Among them, General Motors has created a new car brand Saturn in response to competition from Japanese brands to produce compact fuel-economy vehicles. Saturn motors reached annual sales of 200,000 units in the third year after launch and accounted for 6% of the U.S. compact car market, but due to the lack of follow-up capital investment, saturn cars that have only one model on sale for a long time are also in trouble.
In addition, Chrysler and Ford Motor, taking advantage of the public opinion momentum initiated by the American media and american trade unions, jointly filed an anti-dumping lawsuit against Japan with the International Trade Commission, accusing "Toyota of dumping cars on the US market." However, the International Trade Commission dismissed Chrysler and Ford's anti-dumping allegations against Japanese cars.
Seeing that the counterattack effect of the US domestic car companies against japanese car companies was mediocre, the US government finally could not sit still. In order to protect the U.S. auto industry, there are growing calls in the United States for restrictions on Japanese auto imports. In 1980, the U.S. Senate voted 90-4 to ask the Carter administration to re-evaluate and adjust import policies. The U.S. Congress has also introduced a new bill to limit the import of Japanese cars to the level of 1.5 million.
In the end, Japan and the United States reached an agreement: in 1981, Japan's exports to the United States were limited to 1.68 million vehicles, and in 1982, it was limited to 1.93 million. Under the influence of this initiative, the US domestic car companies have gained a chance to breathe and achieved a turnaround. General Motors made a profit of $3.7 billion in 1983 and $4.7 billion in 1984, the data shows.
In the face of the United States' restrictions on the number of Japanese automobile exports, Japanese car companies quickly came up with corresponding countermeasures and cleverly avoided the constraints of the above policies. Between 1982 and 1983, Japanese automakers such as Toyota, Honda, and Nissan built auto plants in the United States. In addition, Japanese car companies also collectively upgraded their brands in the following years, including Honda's establishment of the Acura brand, Nissan's establishment of Infiniti, and Toyota's establishment of Lexus. They allocate limited export car quotas to luxury brand vehicles with higher added value in order to maximize profits.
For the "little cleverness" of Japanese car companies, the United States naturally looks at it. In order to increase the export competitiveness of products and improve the imbalance in the balance of payments of the United States, the United States signed the famous "Plaza Agreement" with Developed Countries such as Japan in 1985, which dealt a major blow to the Japanese economy and forced the yen to appreciate significantly, which made The competitiveness of Japan's export products, including automobiles, significantly reduced.
In response, Nissan Motor has said: "Assuming that the export price of each vehicle is about 15,000 US dollars, this means that the yen will lose 15,000 yen for every 1 yen appreciation of the US dollar; if it appreciates by 10 yen, it will lose 150,000 yen." In the factory, we tried our best to reduce the cost of each car by thousands, hundreds, or even tens of yen, but the appreciation of the yen savagely increased the cost by 100,000 yen. This seriously dampened the morale and morale of the factory to reduce costs. Especially from 1994 to 1995, the sharp appreciation of the yen plunged Japanese manufacturing companies and workers into a panic, and despair and resignation began to spread among enterprises. ”
Although the United States frequently attacks Japanese car companies, in the long run, it still has not stopped the expansion of the share of Japanese cars in the US car market. Between 1981 and 1985, the share of Japanese cars in the U.S. automotive market remained roughly between 18% and 19%. During the third oil crisis from 1990 to 1992, Japanese car companies continued to increase their market share in the United States.
With the commissioning of Japanese automakers' auto plants in the U.S., the market share of Japanese cars in the U.S. auto market rose to 24.5 percent in 1991. After 1996, the market share of Japanese cars in the United States increased steadily despite the stabilization of the yen exchange rate and the introduction of a number of SUV models by Japanese car companies. By 2009, the market share of Japanese cars in the U.S. auto market rose to 39.7 percent, accounting for almost half of the U.S. auto market.
It is worth mentioning that during the previous oil crises, in addition to Japanese car companies, Korean and German car companies have also carried out penetration of the US auto market. Among them, German car owners attack the market share of luxury brands, and Korean cars focus on the low-end market. Under their continuous efforts, the market share of domestic car companies in the US auto market has gradually declined from 90% before the oil crisis. By 2015, the market share of domestic CAR companies in the US market has fallen below 50%, and most of them are concentrated in the pickup truck and SUV segments.
Take a look:
Throughout the 1970s and 1990s, three oil crises and increasingly stringent laws and regulations have brought great changes to the pattern and development direction of the global automotive market, and have also had a huge impact on the development of global auto companies. Taking history as a mirror, today's automobile electrification and intelligence are becoming an irreversible trend in the future development of the global automotive industry, and the wave of new energy vehicles is sweeping through today's largest automobile market - the Chinese auto market and the global auto market.
In the face of the huge changes in today's automobile industry, Chinese car companies may usher in huge development opportunities, and even do not rule out the possibility of overtaking in curves with new energy. Under the tide of electrification and the encouragement of relevant policies, China's auto market and independent brand car companies have preemptively exerted efforts compared with overseas markets and other multinational car companies, and have accumulated rich research and development achievements in the field of automotive electrification and intelligence.
Up to now, China's auto market is not only the world's largest auto market, but also the world's largest new energy vehicle market. According to the China Association of Automobile Manufacturers, China's new energy vehicle market will sell 3.521 million units in 2021, an increase of 160% over the same period in 2020. Among them, the penetration rate of domestic new energy passenger vehicles is 14.8%, an increase of 9 percentage points over the penetration rate of 5.8% in 2020, while the global penetration rate of new energy vehicles in 2021 is only 7%.
In addition, the latest forecast of the Association of Automobile Manufacturers is that in the whole year of 2022, the cumulative sales of new energy vehicles in China are expected to exceed 6 million, and the penetration rate of the new energy market is about 22%. Among them, the cumulative sales of new energy passenger cars in China will reach 5.5 million units, and the penetration rate of new energy vehicles will increase to about 25%.
It is worth noting that independent brands currently hold a large initiative in the domestic new energy vehicle market, occupying more than 70% of the market share of the new energy vehicle market. Among them, BYD is one of the leaders of its own brand in the new energy vehicle market. Thanks to the simultaneous efforts in the two market segments of pure electric and plug-in hybrid, BYD's sales of new energy vehicles in 2021 exceeded 600,000 units, an increase of 218.3% year-on-year, and the penetration rate of new energy vehicles exceeded 80%, far exceeding the average penetration rate of new energy vehicles in China.
In addition, on April 3 this year, BYD announced that it will stop the production of traditional fuel vehicles from March this year and focus on pure electric and plug-in hybrid vehicles in the future. At this point, BYD became the first car company in the world to stop the production of fuel vehicles. At the same time, BYD also set a new high in sales of new energy vehicles last month, with monthly sales exceeding 100,000 vehicles, which may become the new normal in the future.
In addition to maintaining a large scale of the new energy vehicle market, the power battery, one of the three cores of China's new energy vehicles, also has a very complete supply chain, and the world's largest power battery supplier Ningde Times is located in China. Ouyang Minggao, an academician of the Chinese Academy of Sciences and a professor at Tsinghua University, once said: "70% of the world's battery production capacity is in China, and the products are supplied to the world. Although the United States and Europe are making every effort to build a battery industry chain, and China's battery access to the US market may also be hindered. But in general, the industrial competitiveness of China's power batteries is difficult to shake for a considerable period of time.
The rapid growth of the new energy vehicle market, the relatively perfect new energy vehicle supply chain and the continuous improvement of charging and supplementary infrastructure have provided support for Chinese car companies to seize the advantage in the field of new energy vehicles. However, joint venture car companies and wholly foreign-owned car companies have also made continuous efforts in electrification in recent years to seize the global new energy vehicle market share.
Among them, Volkswagen Group not only made efforts in the European market and achieved good results, but also quickly introduced a variety of electrified models to seize the domestic new energy vehicle market share through two joint ventures in the Chinese market. It is foreseeable that under the transformation of new energy vehicles that pervade the global auto market, global auto companies will set off a new round of cruel knockouts, and it remains to be seen whether Chinese car companies can take advantage of this opportunity to achieve rise.