Not in three years have so few new cars been sold in the EU. Electric car sales fell the most – minus 44 percent in August. The biggest problems are in the car country of Germany:
– The situation for German car manufacturers is similar to what Nokia, Ericsson and Motorola were in when they were knocked out by smartphones in just a few years. They have been sleeping while Chinese manufacturers have overtaken both quality and value for money, says Peter Bryntesson, CEO of the subcontractors’ industry organization Fordonskomponentgruppen (FKG).
Slow and expensive
Volkswagen was certainly early on with electric cars, but slow production rates in the factories combined with expensive labor and expensive energy have made it difficult for the company to assert itself in the competition from China. In addition, VW, like the majority of European manufacturers, has worked according to outdated business models and mainly invested in exclusive electric cars that few could afford to buy.
Both the export and domestic markets are slow – scrapped electric car subsidies are one of the reasons. Ahead of the interim reports, several European car manufacturers have sounded the alarm about dramatically reduced profits: BMW, Mercedes, Stellantis. And then VW, which also talked about closing factories and letting 30,000 employees go.
Many manufacturers are producing far fewer cars than they have capacity for and their plummeting stock prices clearly reflect the bleak outlook.
Millions of jobs at risk
According to Bryntesson, whose FKG represents 300 companies with almost 100,000 employees, Swedish subcontractors feel the downturn in Europe. He does not rule out a warning, but believes that the situation is still somewhat brighter than that in Germany:
– Vehicle manufacturing in Sweden is more focused on trucks and there the competition from China is not as significant as in the passenger car market. At the same time, Germany is an important market for Swedish companies.
According to the industry organization Acea, the car industry employs just over 13 million people in the EU – jobs that may be at risk. Critics believe that Europe’s car industry has had plenty of time to adapt, however deliberately held back the launch of simpler electric cars in order to be able to sell as many petrol and diesel cars as possible as long as these are allowed.
The question that many ask themselves is whether the manufacturers have stuck to the old for too long, and that the Chinese competitors have overtaken them for good. Exactly what happened with Nokia and Ericsson phones.