Motor industry taking action as pandemic hits world sales
- Credit: Getty Images
There is a lot happening in the motor industry as manufactures look for ways to reduce costs and accept not only is 2021 going to be a tough year but it will be some time before world sales return to pre-Covid levels.
Add to that competition from Chinese manufacturers and the costs of new ways to power their products with clean emissions, and you can understand why their task is a massive one.
Britain has the added pressure of Brexit and although a zero-tariff rate has been agreed, this will put increased demands on British motor factories where in order to qualify for the zero tariff, 55 per cent of the car's value has to be derived from the UK or the EU when exported to the EU.
Therefore, Nissan's statement that they would be expanding to provide battery production and guarantee the future of their factory in Sunderland was welcome news.
Andy Palmer, former boss of Aston Martin, stated up to 800,000 jobs will be at risk if the Government does not encourage battery investment.
This was further hinted at by Carlos Tavares the CEO of Stellantis, which own Vauxhall, who said that future investment in their British factory at Ellesmere Port will depend on Government support.
Stellantis is just one of several new alliances which are being created to achieve reductions in costs with common platforms and increased coverage of world markets.
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Stellantis comprises PSA, which includes Peugeot, Citroen and Vauxhall now added to with FCA which includes Chrysler, Jeep, Fiat and Alfa Romeo in its portfolio.
This makes Stellantis the fourth largest motor manufacturing company in the world.
In China, where electric vehicle sales are leading the rest of the world with 47 per cent of all electric vehicles sold, Baidu the leading search engine company there, have teamed up with Geely who own Volvo and have a stake in Mercedes Benz owners Daimler.
This alliance will work on smart electric vehicles as Baidu formed its autonomous driving unit, Apollo, in 2017 which mainly supplies technology powered by Artificial Intelligence.
Other internet giants like Tencent, Amazon and Alphabet are all ready to join the fray.
Tesla, already growing rapidly, are also considering whether to build a factory in India.
So what, you may say. What does all this have to do me?
Well, in theory all these changes should help to provide new technologies but without a massive increase in costs and although brands will look different they will share platforms and power trains to further spread cost.
Manufacturers are unlikely to stop there. A large part of their costs is in their distribution model and they are looking at ways to change it.
They are encouraged by the growth of internet sales during the pandemic and one possibility is to move forward with a very different retail proposition with less dealers in a very different format.
Next week I will take you through some of the possible changes on the horizon and hopefully get your opinions on whether it appeals or not.
Keep safe and stay smiling.