A tax on vehicles of 1 800 kg and more in Europe? Who would be concerned? (1/2)
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A tax on vehicles of 1 800 kg and more in Europe? Who would be concerned? (1/2)
- In France, in the week of November 16, a law was adopted by the National Assembly on a tax related to the mass of passenger cars. From January 1, 2022, any new passenger car registered in France, whose “mass in running order” is greater than 1,800 kg will be subject to a tax of 10 Euros per additional kilogram.
- The “mass in running order” adopted is defined by the EU Regulation N° 1230/2012 and takes into account the mass of the vehicle whose fuel tank(s) are filled to at least 90% of their capacities, the mass of the driver (75 kg) and fitted with standard equipment in accordance with the carmaker’s specifications.
- Vehicles with an all-electric range in town over 50 kilometres, meaning now battery electric vehicles, as well as plug-in hybrids are not affected by this measure. Reductions are also provided, in particular for households with at least three children or when the vehicle, acquired by a company or a legal person, has at least eight seats.
- Thus defined, Inovevanalyzed for France, which vehicles would be under this law and consequently their sales and production volumes. Therefore it appears that 3% of thermal and non plug-in hybrid passenger cars sold in France would be covered by this law (based on 2019 sales of passenger cars in France), i.e. a market of around 70,000 units. This is a maximum envelope, not taking into account the specificity of the vehicles (5 or 7 seats), nor the characteristics of the buyers (household of 5 or not). The majority of these vehicles are sold by Mercedes, Volvo and Audi.
- On the production side, this law does not impact the automotive industry located in France, as a maximum of 1% of vehicles weighing over 1 800 kg (or +1 725 kg without the driver's mass) are assembled in French plants. These are essentially light utility vehicles such as Renault Trafic or Peugeot Expert, produced in passenger transport versions. And among these vehicles, a large part is acquired by companies, therefore not subject to the law. In other words, the mass tax does not impact the French automobile industry.
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A tax on vehicles of 1 800 kg and more in Europe? Who would be concerned? (2/2)
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A tax on vehicles of 1 800 kg and more in Europe? Who would be concerned? (2/2)
- Now imagine that this law is transposed at European level as part of an hypothetical (but plausible) project for a European tax on heavy passenger cars. What would be in this case, the vehicles concerned, their sales and production volumes?
- If we keep the same definitions and criteria used for the law in France, the analysis shows that around 8% of the European market for thermal and non-plug-in hybrid passenger cars would be impacted by such a law, i.e. nearly 1.3 million vehicles. Which carmakers sell these vehicles? The vast majority (65% of the +1 800 kg market) is sold by the brands Mercedes, Volvo, Audi, Land Rover and VW. The VW group (VW, Audi, Skoda, Seat, Porsche, Bentley, etc.) alone sells a third of passenger cars in this weight range.
- Of these 1.3 million vehicles sold in Europe, 28% are produced in Germany, which is the largest contributor in this market. Next come imported vehicles (by European or non-European carmakers) which represent 23% of sales. At a second level, we find Great Britain (12%) and Sweden (9%). As we have seen in the previous pages, France produces very few vehicles over 1,800 kg (1% of this market).
- Finally, these vehicles weighing over 1,800 kg produced in Europe for the European market represent 8% of all thermal vehicles produced in Europe for the European market (ie nearly one million vehicles). It should be noted that around 1 million vehicles over 1,800 kg are also produced in Europe but exported outside Europe.
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Europe lost 4.3 million vehicles (PC + LUV) over 9 months 2020
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Europe lost 4.3 million vehicles (PC + LUV) over 9 months 2020
- The loss of production of passenger cars (PCs) and light utility vehicles (LCVs) in Europe is estimated at 4.3 million units in the period of the first nine months of 2020 compared to the first nine months of 2019. The scope of this analysis Europe 29 countries including Great Britain, but without Serbia, Turkey and Russia.
- The PC + LUV production volume estimated according to Inovev would be 9,321,660 units against 13,610,526 units a year earlier. The difference is therefore 4,288,866 units. If we take into account only passenger cars, the difference is only 3,876,842 units, the estimated total being 8,186,537 units compared to 12,063,379 units a year earlier.
- This loss of production is mainly due to the Covid-19 crisis which caused the closure of most plants located in Europe during one month or two depending on the country and the carmaker. It can also be specified that the fall of global markets caused a significant drop in exports and the recovery starting in summer took place gradually and on new sanitary rules inside plants, which did not helped to restart more intensively the production during this post lock-down period. Consequently, stocks are very low, lower than usual, because during the lock down more vehicles were sold than produced.
- The production volume lost in 2020 cannot be cached up, because if plants can lose 30% of their volume as it was during the first nine months of 2020, they cannot produce 30% more than their maximum capacity. Especially as the market recovery is unlikely to be "V" shaped, but will be gradual and long over time.
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GMC unveils its 100% electric Hummer pickup
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GMC unveils its 100% electric Hummer pickup
- The GM Group, through its GMC brand, has unveiled its new all-electric pickup to be launch onto the market in 2021 under the Hummer brand name. Hummer was a GM brand producing SUV between 1998 and 2010, after being distributed by AM General between 1992 and 1998, which was a supplier to the US military.
- The 2008-2009 economic crisis stopped the Hummer brand, as for Pontiac and Saturn brands also belonging to the GM group. But the Hummer name remained the property of the GM group.
- The leading American carmaker therefore took the opportunity of the popularity of SUVs, pick-ups and electric powertrains to relaunch the Hummer name in the category of 100% electric pick-ups, competing the Tesla Cybertruck pick-up, unveiled last spring and which will be on the market next year.
- The Hummer pick-up, with four doors and short be, will be marketed in three different versions: the EV2 (625 hp) authorizing 400 km of autonomy priced at $80,000, the EV2X (800 hp) authorizing 482 km of autonomy priced at $90,000, the EV3X (800 hp) authorizing 482 km of autonomy priced at 100,000 dollars and EV Edition (1,000 hp) authorizing 563 km of autonomy priced at $110,000. These prices remain uncompetitive compared to those of the Tesla Cybertruck as the Californian carmaker announces $70,000 for the version allowing 800 km of autonomy and $40,000 for the version allowing 400 km of autonomy.
- The more classic design of the GMC Hummer could however convince some potential customers.
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Kia brand could account for almost 30% of vehicles produced by Hyundai-Kia in India
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Kia brand could account for almost 30% of vehicles produced by Hyundai-Kia in India
- The launch of Kia in India is quite recent, as it started in August 2019. The Kia brand has been added to the Hyundai brand in this market with three different models, the first launched in August 2019 (the SUV Kia Seltos- 4.32 m long), the second launched in February 2020 (MPV Kia Carnival - 5.11 m long) and the third launched in September 2020 (the SUV Kia Sonet- 4.00 m long). The three models produced in India by Kia are therefore complementary, as the Sonetcan be considered as a B segment model, the Seltos as a C-segment model and the Carnival as an E-segment model. These three models are produced at the Hyundai plant in Chennai.
- Kia's production volume in India is increasing every month, except during the lock-down introduced in April 2020. This volume has increased from 5,000 monthly units in May 2020 to 10,000 in July, 17,000 in August and 25,000 in September. Kia has produced more than 165,000 cars since August 2019. The brand has found its market, which was not easy as the Indian market is 50% shared by Maruti-Suzuki and 15% by Hyundai. These two carmakers are leaders in India.
- Hyundai does not appear to have suffered too much from Kia's entry into the Indian market. The two brands coexist, except that the capacity of the Chennai plant is limited to 750,000 units per year. So Kia will have to take some capacities on Hyundai lines. In 2019, this plant produced 737,000 vehicles (including 55,000 Kia), against 713,000 in 2018 and 715,000 in 2017. At the current rate, Kia could represent 200,000 vehicles per year at the Chennai plant (100,000 Sonet and 100,000 Seltos models).
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