Volkswagen postpones the construction of its assembly plant in Turkey
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Volkswagen postpones the construction of its assembly plant in Turkey
- The Volkswagen Group had initially planned to shift production of the Passat from the German factory in Emden to a factory in Turkey that the carmaker was planning to build. The German carmaker recently announced that it has decided to postpone the construction of the assembly plant to a later (unspecified) date. No reason given, but we can assume that the unstable local situation and the political conflict that seems to be playing out between Turkey and Europe as well as the risk of economic sanctions should have impacted VW decision. But other reasons linked to the expected volumes of the future Passat (which sales are continuously declining) may also explain why this future plant is no longer a priority and a necessary project.
- The future Volkswagen Passat, which should be launched in 2022, will therefore be produced at the group's plant in Bratislava, Slovakia, which today assembles the Volkswagen Touareg, Audi Q7, Audi Q8 and Porsche Cayenne E-segment SUVs, as well as small A-segment sedans, Volkswagen Up, Seat Mii and Skoda Citigo.
- From 2022, the Bratislava plant will produce the Volkswagen Passat as well as the next generation Skoda Superb scheduled for 2023.
It means that the small A-segment sedans (converted to electric powertrains) will be produced at another plant, probably in Emden. Volkswagen management has announced that this plant will undergo a transformation by 2022 as the Zwickau plant had experienced before the arrival of ID3 and ID4 in 2020.
It means that the small A-segment sedans (converted to electric powertrains) will be produced at another plant, probably in Emden. Volkswagen management has announced that this plant will undergo a transformation by 2022 as the Zwickau plant had experienced before the arrival of ID3 and ID4 in 2020.
- Therefore, we can foresee a production of battery electric models in Emden, which can only be the future ID1 and ID2. As for the new generations of E-segment SUVs, they will be transferred from Bratislava to the German plant in Hanover, which will also produce the future electric Kombi (known today as ID Buzz).
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Evolution of the European market by type of engine in 2020
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Evolution of the European market by type of engine in 2020
- The share of diesel continues to decline sharply on the European market, as today this share has fallen to 27% of all passenger car registrations in 2020, while it was still 32% in 2019, 36 % in 2018, 45% in 2017, 50% in 2016 and 55% in 2012.
- Diesel has therefore lost 28 points in eight years, which have not been offset by the increase in alternative engines (hybrids, plug-in hybrids, 100% electric) since these now represent only 21% of registrations, despite strong growth recorded over the past two or three years.
- Among this 21%, hybrid powertrains (HEV) represent 12% of sales in 2020, mainly made by Toyota, Lexus, Hyundai and Kia. Plug-in hybrid powertrains (PHEV) represent 4% of sales in 2020, mainly made by Premium brands. Finally, the 100% electric engine (BEV) represents 5% of sales in 2020, produced mainly by Renault and Tesla, but many competitors are starting to ramp up (Volkswagen, Hyundai, Peugeot, Opel, etc.).
- The crucial question is how far the decline in diesel will go. Some foresee the end of diesel in 2030 in passenger car registrations but is this a possible scenario? And will diesel remain in the utility vehicle categories? The future of Diesel remains very uncertain in Europe, not necessarily because of city policies because very few large European cities have announced the ban on diesel in their cities, but rather future anti-pollution standards (EURO VII) which could impose carmakers to no longer produce pure thermal vehicles.
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The UK plans to ban the sale of new cars with combustion engines from 2030. What consequences for the market of new cars?
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The UK plans to ban the sale of new cars with combustion engines from 2030. What consequences for the market of new cars?
- The UK plans to ban the sale of new cars with combustion engine as early as 2030, five years ahead of the previously deadline announced. This ban would apply to gasoline and diesel cars, followed by hybrids and plug-in hybrids five years later, in 2035.
- The UK car market over ten months 2020 is made up as follows: 1,384,601 cars including 100,160 HEV, 75,325 BEV and 44,046 PHEV representing a proportion of 16% xEVsand 84% petrol and diesel engines (1,165 070 units). British car production, which reached 780,000 cars in 10 months of 2020, produced only 125,000 hybrid and electric cars, accounting for 16% of all car production in the country. We can see that the proportion of cars with thermal engines is largely the majority in the country and that it will not be easy to replace all these cars with electric cars in ten or fifteen years, in terms of sales or production.
- The British car park is currently composed of 31.8 million cars of which 18.8 million run on gasoline and 12.3 million on diesel. The remains (685,000 units) is made up of hybrid (515,000 units), plug-in hybrids (80,000 units) and electric (90,000 units) cars.
- The United Kingdom has announced a change to this calendar, going from 2035 to 2030, after announcing last February that it was going from 2040 to 2035. So in 9 months, the calendar has accelerated by 5 years….and consequently raises doubts about the reliability of this calendar.
- Nevertheless, if this schedule is confirmed, there is a strong risk that the market will fall very sharply for at least 3-4 years after 2030. Indeed, if the ban on sales of combustion vehicles is applied but that at the same time, owners of thermal cars will be able to continue to circulate, it can be expected that buyers (professionals or individuals) will anticipate purchases of thermal vehicles before 2030 or delay the replacement of their existing vehicles to a period beyond of 2030. This could be even more true if the conditions for a real growth of the BEV market are not met by 2030 (numerous recharging infrastructure + purchase price of electric vehicles equivalent to thermal vehicles).
- Are we going to a sharp decline of the UK market in 2030? The example of the Norwegian market (end of sales of thermal vehicles in 2025) will be interesting to analyse, even though the Norwegian market is already today at 50% in BEV and 70% in BEV + PHEV.
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Which European countries were most impacted by the drop in production in 2020?
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Which European countries were most impacted by the drop in production in 2020?
- European automobile production (29 countries) fell by 30% over the 10 months of 2020, compared to the same period of 2019. The decline reached 31.1% for passenger cars, while it is lower for light utility vehicles (-24.8%). This last figure should be compared with -23.7% of LUV sales in Europe over the first nine months of 2020.
- Regarding passenger cars, the 29.3% drop in the European passenger car market indicates that in-stock sales and lower exports played a role in the European production volume decline.
- France is the most affected European country by the drop in production (-47%), because in addition to the consequences of the spring 2020 lock down, France has suffered greatly from the transfer to Spain of the Peugeot 2008, the transfer of the Renault Clio in Slovenia, the transfer of the Peugeot 208 to Slovakia and the transfer of the Opel Grandland to Germany. Relocation therefore amplified the phenomenon of the French declining production. In addition, the Peugeot 308 and Renault Kangoo are at the end of their commercial career, with their replacement scheduled for 2021. As a result, France has fallen behind the Czech Republic in 2020.
- Britain (-36%) continues to suffer from Brexit uncertainty. Austria recorded a decrease of 32% but on small volumes. Germany shows a decline of 31% comparable to Europe as a whole. Spain (-25%) and Italy (-25%) benefit from the arrival of new models in their factories (Peugeot 2008 in Spain and Jeep Compass in Italy). Belgium (-1%) achieved the best performance thanks to good sales performance of Volvo XC40 and Audi E-Tron, but also on small volumes.
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The average weight of passenger cars has not increased in Europe since 2011
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The average weight of passenger cars has not increased in Europe since 2011
- The average weight of passenger cars produced in Europe has not changed since 2011, when it had increased significantly between 1990 and 2010, from 1,020 kg to 1,380 kg. Inovev wondered why this average weight of vehicles produced in Europe had not changed since 2011 and had suddenly stabilized since that date. Indeed, with the arrival of SUVs in the 2000s which now represent 30% of European production, we could have expected an increase in the average weight of vehicles, knowing that SUVs are heavier than sedans of the same segment.
- In fact, several factors played at the same time and contributed to the stabilization of the average weight.
1. Sales of sedans and minivans have fallen sharply over the past thirty years, representing only 48% of European production in 2019 and the average weight of a sedan is today 1,256 kilos against 1,296 kilos in 2011 .
2. SUV sales have grown significantly over the past twenty years, representing 30% of European production in 2019. But the average weight of an SUV is today 1,545 kilos compared to 1,685 kilos in 2011, thanks to the arrival of B-segment SUVs.
3. But the most decisive factor is the shift from buyers of higher-segment sedans to lower-segment SUVs. For example from D-segment sedans to C-segment SUVs, which stabilized the average weight at the demand level. This seems logical since the price of a C-segment SUV is in the same range of the price of a D-segment sedan.
4. Finally and at a second level, sales of electric cars have increased over the past five years, but their production volume, which remains low (267,000 units in 2019 out of nearly 20 million vehicles, all engines combined) has no impact. The average weight of a BEV today is 1,557 kilograms, whereas there were no electric cars in 2011.
- For more information, Inovev has conducted a complete study of the evolution of vehicles mass in the European production. Please contact us for more information.
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