Changes in the Global Auto Industry
The global auto industry has been experiencing some big changes lately. Some big players in the industry are restructuring, while others are establishing themselves in developing countries and emerging markets. Read on to learn more about some of these changes.
China surpasses the United States to become the world’s largest automobile market
The Chinese auto industry has overtaken the United States to become the world’s largest automobile market. Sales in China have increased by double digits for several years. With the exception of the global financial crisis, the Chinese auto market has seen growth.
In the last two years, China’s auto export has grown by a whopping 102 percent. A growing middle class in tier 2 and 3 cities has led to increased demand for small and mid-sized vehicles.
During the first six months of the year, China’s total auto sales soared by 17.7 per cent. Automakers have been encouraged to open new plants in developing markets, and they’re also working to develop cheaper, smaller cars.
U.S. automakers are expanding to developing countries and emerging markets
The global auto industry has seen an impressive 35 percent growth in the last five years, but there is more to the story. In fact, a number of foreign automakers have started to expand into developing countries and emerging markets.
Several large U.S. companies are focusing on these areas, such as Ford, Nissan, and Toyota. They have invested in research and development, as well as manufacturing facilities in these countries to ensure they are competitive.
However, there are many risks involved in entering the market. From currency volatility to geopolitical risk, it is important to be aware of them before entering into a relationship with a country.
Electric vehicles and automated vehicles are key items to watch in 2022
Electric vehicles (EVs) and automated vehicles (AVs) are set to change the auto industry. EVs are a form of clean transportation that can reduce carbon emissions and improve fuel economy. However, they are still in their infancy. Automakers and suppliers face significant risks as EVs become mainstream.
In recent years, a number of major automakers have started putting forward a more comprehensive electrification strategy. These companies see electrification as a way to keep up with regulations and capture market share. They have also begun developing a wider range of models.
Ford expects to have 50 percent of its sales in electric vehicles by 2030. Meanwhile, Volkswagen and BMW both aim to sell at least 50% of their vehicles in this way by the end of the decade.
Toyota retains its status as the leading global automotive group in 2021
Toyota Motor Corporation retained its status as the world’s leading global automotive group in 2021. In 2021, Toyota Motor Company and its affiliates sold 1.3 million vehicles in 200 countries. While the company was unable to achieve its net-zero emission target in the near-term, it still aims to sell 3.5 million electric vehicles annually by 2030.
Toyota’s public messaging on climate policy is generally positive. The company supports the Paris Agreement and has consistently supported Japan’s long-term climate neutrality targets. However, it has limited support for decarbonization of the transport sector.
Last year, Toyota set a goal to invest US$35 billion in the development of electric vehicles. The investment is part of Toyota’s effort to sell 3.5 million electric vehicles a year by 2030. It is also part of the company’s strategy to increase its market share in the battery technology industry.
Chrysler is shedding thirteen thousand workers as part of its restructuring
The auto industry is in a state of crisis. Many companies have laid off tens of thousands of workers in the United States over the past year. However, it’s not all bad news. As long as large stakeholder groups can agree to cut debt and change their stakes, the company can stay afloat.
In the case of Chrysler and General Motors, the restructuring will include closing plants and laying off thousands of workers. These cuts are part of a broad attack on auto workers.
Chrysler and General Motors are following their Detroit counterparts into bankruptcy protection. If they don’t restructure, their factories will close for 11 weeks, through mid-July.
Quality and productivity improvement initiatives are key items to watch in 2022
The latest figures show that the global auto industry is a rather uninspiring place to be in. In fact, global sales were down by more than 25% in the first half of the year. While there were a few notable exceptions such as Nissan and Toyota, the aforementioned titans remained the exception to the rule.
As a result, the auto industry has a lot of room for improvement. There are several things to watch out for in the coming months. For instance, battery supplies are becoming an increasingly important issue as demand for new vehicles skyrockets. If supply can’t keep up with demand, metal prices could see an uptick.