Friday, April 12

Having a car is (increasingly) rich: the industry is killing the cheap ranges in its move to the electric car

In the midst of a crisis never seen before in the car market, manufacturers continue to make profits. Especially those dedicated to premium and luxury models. A photograph that is forcing a rethink in the sale of vehicles. The last to position itself has been the Volkswagen Group: they will sell more expensive cars.

Shortage. The semiconductor crisis and the war in Ukraine have broken the vehicle supply chain, with a shortage of them and a situation that has not been known since the industry took off: demand exceeds supply. In fact, the consulting firm S&P Global Mobility has assured that by 2030 25 million fewer vehicles will be manufactured than expected.

Coronavirus. The arrival of the coronavirus pandemic in 2020 caused a massive closure of production plants around the world. Falls in the sale of vehicles never seen before and millionaire losses for some companies such as Seat. However, Mercedes made a profit in 2020 (before interest and taxes) of 6.8 billion euros. The figure was higher than that registered in 2019 (6,200 million euros). And this soared in 2021 to 14,000 million euros.

less and more expensive. At the time that Mercedes managed to reach these figures, it headed the lists of the brands with the longest waiting times for a vehicle. The movement was clear: sell fewer vehicles and prioritize the most expensive and those with the highest profit margin. In 2021 it sold 370,000 fewer vehicles than in 2020 and 730,000 fewer cars than in 2019. BMW opted for the same strategy and even Oliver Zipse, CEO of the brand, stressed that they were not “promoting a volume strategy”.

Also Read  Vintage but not much: these Bluetooth turntables combine tradition and modernity

the town car. The Volkswagen Group bears this description of “people’s car” in its own name. But it seems that it will follow the same path as the aforementioned brands. This has been confirmed by Arno Antlitz himself, financial director of the Volkswagen Group, to the Financial Times. “The key objective is not growth… We are more focused on quality and margins, rather than volume and market share.”

In other words, the Volkswagen Group will also bet on designing a strategy where its premium and luxury brands, such as Porsche and Audi, gain weight. The electric car will be the point of no return and along the way we will lose dozens of combustion vehicles. In fact, from the economic newspaper points to a reduction of 60% in models with combustion engines.

Simpler, more benefits. Electric cars are still expensive. And it is logical that, to enter the market, the firms are choosing to electrify the upper part of their offer more quickly. The trend is clear among the Premium firms, with the launch of models such as the BMW iX, the Mercedes EQS or the Audi e-tron and e-tron GT.

If Spain wants to manufacture the electric car, it already knows the price: thousands of layoffs and salary cuts

If we assume that the electric vehicle currently has a more expensive price, it is easier to sell it to those who already have a car to make up for the lack of autonomy and charging times of this type of car. And while component prices are skyrocketing, they are easier to produce and cheaper to produce. In fact, thousands of layoffs are already announced with the arrival of the electric car.

Also Read  Advanced Analytics: steps to implement it

Seat, another example. A few days ago we told you about the plans that the Volkswagen Group had in Spain. A historic investment to build the battery factory in Sagunto that came with a surprise under its arm. Martorell will go on to supply parts for small and electric vehicles for the entire Volkswagen Group.

The measure comes after the brand has had millionaire losses during these years of crisis and, however, its firm of sports and electrified cars is growing at a good pace. “Cupra is the future” Wayne Griffiths even mentioned at the press conference to present the results. Without a doubt, a declaration of intent.

Leave a Reply

Your email address will not be published. Required fields are marked *