Production in France rose more than the UK in the 1st half 2015

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Production in France rose more than the UK in the 1st half 2015

 

- Car production (PC + LUV) in France grew more than in the United Kingdom in the first half of 2015. France produced 1.035 million cars in the first half of 2015 against 1.0 million in the first half of 2014, representing an increase of 3,5%. For its part, the United Kingdom produced 0.834 million cars against 0.826 million cars a year earlier, representing an increase of only 1%.

- France therefore continues to widen the gap started with the United Kingdom a year and a half ago, indeed, the gap was only of 10% between French production and UK production in 2013, it widened in 2014 to 17% and will approach 20% by the end of 2015.

- Although the recovery of the European market (+ 8.2% in the first half) benefited both countries, specific factors were the cause of a greater increase in French production than that of the UK. In France, the arrival of the Renault Trafic in Sandouville and the rise in production rates of the Peugeot 308 had a greater offsetting than the decline of other older models. In England, the transfer of the Renault Trafic from Luton to Sandouville as well as a portion of the Mini production from Cowley to Born (Netherlands) has impacted local production. In addition, the fall in exports to Russia has far more disadvantaged British production since England was exporting to Russia up to 10 times as many vehicles than France was.

- Even though an expected recovery of the Russian market in 2016-2017 could allow British production to grow, the projects discussed about opening plants in Slovakia (for the production of the future Land Rover Defender) and the USA (Jaguar and Land Rover) could be a hindrance to growth. In France, the additional capabilities available as well as the arrival of new models (Renault Talisman in 2015, Nissan Micra in 2016) will do more in favour of local production.

 

15-17-6  

 

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The VW Golf is the best selling car in Europe since 2005

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The VW Golf is the best selling car in Europe since 2005

 

- Despite the emergence of new models and new bodies (MPV and SUV), the Volkswagen Golf has been the European market leader since 2005. It has been selling on average between 450 000 and 500 000 units annually, with the exception of the year 2000, when it approached the 600 000 units threshold in a European market that had an overall sales peak in 2009 and where it exceeded 600 000 units thanks to the scrappage schemes introduced in Germany.

- When comparing the curve of sales of the Golf to those of its most direct competitors like the Ford Focus, Opel Astra and Renault Megane, we see that the fall of over 20% recorded for the European market as a whole between 2007 and 2013 had no impact on the Volkswagen Golf in the same period since its results were positive, while the Focus, Astra and Megane suffered declines of 50%, 57% and 49% respectively .

- The Golf is sold mainly in Germany, where it reaches on average 50% of its European sales (up to 60% in 2009). It has been ranked number 1 in the country for decades. Britain is the second country in sales of Golf where it is  in the top 5.

- There are many reasons for the current position of the Golf, but among other things include a strong and continuous history since the first generation and thus the name "Golf" that sounding so familiar. We can also mention its positioning between the mainstream category and the premium one (competitor Audi A3 - BMW 1 Series and Mercedes Class A) like the Passat in the segment D. Finally the purchase by companies is also an important factor in the success and maintenance of this vehicle in the European top.

- In the future, the vehicle's position is unlikely to change, this model is a safe bet for the European market but has not found the same echo in other Asian and American markets, that are less fond of the hatchback sedan body type.

 

15-17-9  

 

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Which carmakers have benefited from the recovery of the US market

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Which carmakers have benefited from the recovery of the US market

 

- The US market grew by 58.2% between 2009 and 2014. During this post-crisis period it is above all local US production which benefited from the market recovery, as production doubled between 2009 and in 2014 while imports rose by only 10% and exports almost quadrupled during the same period.

- First observation: all manufacturers have benefited from the recovery of the US market, with the exception of two manufacturers: Volvo (-8.3%) and Suzuki (no longer present). Volvo has seen sales of its 2009 flagship models (S70, XC90, S40 / V50) declined until 2014, pending renewal. For Suzuki, whose sales have been made confidential for a long time now, its range of vehicles (small models, sedans and SUVs) did not correspond to local demand which was craving for large SUVs, pick-ups and sedans. Suzuki has gradually disappeared from the US market.

- Second observation: it is the German (BMW, Daimler and VW), Korean (Hyundai-Kia), French (Renault-Nissan) and Italian groups (FCA) that have the most benefited from this recovery. On the other hand, American historical leaders (GM and Ford) and Japanese groups (Toyota, Honda, Mazda and Mitsubishi) benefited less from the stimulus and therefore lost a few tenths of points of market share. This has benefited European exports but not really Japanese exports.

- By group, the group Fuji Heavy and its Subaru brand benefited the most from the recovery, with an increase of 137.1% of its sales in the US in five years. Followed by FCA (+ 124.5%), Volkswagen (+ 88.7%), Renault-Nissan (+ 80.1%), Daimler (+ 78.8%), Hyundai-Kia (+ 77.6% ) and BMW groups (+ 63.8%). These groups have therefore increased their market share in the US.

- On the other hand, the following groups increased less than the US market itself between 2009 and 2014: Ford (+ 52.9%), Mazda (+ 47.2%), Mitsubishi (+ 43.8%), GM (+ 42.3%), Toyota (+ 34.1%) and Honda (+ 33.9%). These groups hence saw their market share decline.

 

15-17-2  

 

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In 2014, Indonesia became the first market in the ASEAN region

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In 2014, Indonesia became the first market in the ASEAN region

 

- Three main countries comprise the ASEAN region (Association of Southeast Asian Nations) in terms of market and automobile production: Indonesia, Thailand and Malaysia. Indonesia has recently overtaken Thailand as the market leader of the ASEAN region.


- Thailand decreased from 1 330 000 vehicles sold in 2013 to 882 000 in 2014 (against 1 425 000 in 2012). The country has suffered from an unstable political and economic situation, which has resulted in a decrease of its market and its car production. Globally a major hub of pickup van manufacturing, its production was the highest of the ASEAN region, with 1 878 000 vehicles produced in 2014, against 2 460 000 in 2013 and 2 450 000 in 2012, but the gap with Indonesia has now greatly reduced.


- Despite a slight decline in its market (due to currency fluctuations and rising fuel prices) in 2014 (1 208 000 vehicles were sold in 2014, against 1 230 000 in 2013, Indonesian growth stayed high (+ 150% between 2010 and 2014), following the country's economic growth and thanks to the success of "LCGC - Low Cost Green Cars". Its production reached 1 289 000 vehicles in 2014, against 1 117 000 vehicles in 2013 thanks to the manufacturing of models meeting the "LCGC” regional standards and using the country as an export base.


- Malaysia is the third ASEAN country, in both terms of market and of  production. It has recorded a slow growth since 2005, with 600 000 vehicles produced in 2014 and just over 600 000 vehicles sold, these figures being almost equivalent to figures reached in 2005. However, Malaysia is ahead of the Philippines and Vietnam which represent a much lower volume (270 000 sales in 2014 for the Philippines and 135 000 for Vietnam).

 

15-17-1  

 

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Overcapacity of the Chinese Automotive Industry: Reorganization Becoming Urgent Issue

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Overcapacity of the Chinese Automotive Industry: Reorganization Becoming Urgent Issue

 

- Due to overcapacities, some local automakers, which face mounting business difficulties, are bought by Sino-foreign joint ventures.
In March 2015, Changan Ford announced that it purchased Hafei Motor's manufacturing facility in Heilongjiang province, leaving the Chinese automaker only with one plant in Shandong province. Annual production capacity of the acquired plant is 200,000 units. Changan Ford intends to keep the existing production line, which was used for the manufacturing of Changan Automobile's Alsvin V3, and install a new production line as well for Ford brand models.

- Although the purchase of local automakers by Sino-foreign manufacturers is one way of dealing with overcapacity, it could also cause the rapid decline of Chinese automakers. Therefore, the central government cannot actively promote such trend in the automotive industry.

- For this reason, in order to resolve the issue of overcapacity, Chinese automakers should engage in reorganization and consolidation.
In China, there are dozens of local automakers which were set up by regional governments in an effort to develop the local economy; however, many of them suffer from low operating ratio. Medium and small automakers should be absorbed by SAIC, Changan, Dongfeng and other major Chinese manufacturers in order to eliminate overcapacity. In the long term, product appeal of large Chinese automakers must be improved to adequately address overcapacity. Instead of forceful reorganization directed by the central government, R&D support would be necessary to boost product power.

- Regarding the Chinese automotive market, low growth is projected to continue in the coming years. Therefore, if Chinese automakers cannot tackle overcapacity early on, they will fall even further behind Sino-foreign manufacturers.

 

15-16-9  

 

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