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Automotive Industry:Europe: Difference between revisions
Automotive Industry:Europe (view source)
Revision as of 19:39, 14 September 2023
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[[File:Screenshot 2023-09-07 113242.png|center|thumb|793x793px|https://www.bcg.com/publications/2023/european-auto-industry-is-under-pressure]] | [[File:Screenshot 2023-09-07 113242.png|center|thumb|793x793px|https://www.bcg.com/publications/2023/european-auto-industry-is-under-pressure]] | ||
* Technological Leadership: '''the advantages that European OEMs had in ICE design and high-quality engineering are increasingly losing their importance''' as the changeover to electric and software-defined vehicles accelerate'''s'''. In the electric vehicle (EV) realm, the '''European auto sector is having difficulty keeping up with other global players in battery cell design, power electronics, extending battery range, and innovative rapid charging technologies'''. Companies skilled in designing software first and hardware second are increasingly poised for market leadership. | * Technological Leadership: '''the advantages that European OEMs had in ICE design and high-quality engineering are increasingly losing their importance''' as the changeover to electric and software-defined vehicles accelerate'''s'''. In the electric vehicle (EV) realm, the '''European auto sector is having difficulty keeping up with other global players in battery cell design, power electronics, extending battery range, and innovative rapid charging technologies'''. Companies skilled in designing software first and hardware second are increasingly poised for market leadership. Names like X-PENG, NIO and BYD in China and US BEV companies Tesla, Lucid, and Rivian are viewed as serious new competitors. | ||
* Cost: '''US and Chinese factories rapidly adopt robotics, moving closer to more sophisticated automation'''. Moreover, many of these companies have more flexible cost structures because their labor outlays are lower due to little or no unionization at their plants. And '''energy price volatility is likely to be a permanent fixture, the result of geopolitical conflicts and resource scarcity, which will affect European automakers more than such companies in other regions.''' | * Cost: '''US and Chinese factories rapidly adopt robotics, moving closer to more sophisticated automation'''. Moreover, many of these companies have more flexible cost structures because their labor outlays are lower due to little or no unionization at their plants. And '''energy price volatility is likely to be a permanent fixture, the result of geopolitical conflicts and resource scarcity, which will affect European automakers more than such companies in other regions.''' | ||
* Brand: EV-related sales spurt in China will be difficult for companies with an old-fashioned and staid brand image to navigate. It is worth noting, as well, that some Chinese EV companies are piggybacking on existing dealer networks in Europe to quickly introduce their brands to local consumers, hoping to replace European OEMs in their home markets. | * Brand: In a huge strategic push, '''China is promoting its technological independence and breakthroughs while upgrading the Made in China reputation to no longer stand for cheap production'''. EV-related sales spurt in China will be difficult for companies with an old-fashioned and staid brand image to navigate. It is worth noting, as well, that some Chinese EV companies are piggybacking on existing dealer networks in Europe to quickly introduce their brands to local consumers, hoping to replace European OEMs in their home markets. | ||
* Geopolitics: '''Planned deglobalization is more the norm now to guard against political uncertainties and disruptio'''n. Supply chains are shrinking as automakers in developed countries are encouraged to source parts and materials locally. | * Geopolitics: '''Planned deglobalization is more the norm now to guard against political uncertainties and disruptio'''n. Supply chains are shrinking as automakers in developed countries are encouraged to source parts and materials locally. | ||
* Chinese Sales Market: The rise of Chinese EV makers catering to local preferences has forced European companies to lower their prices in China, as they struggle to sell as planned. '''The Chinese market is becoming more challenging for European OEMs as Chinese competitors improve and nationalism grows.''' | * Chinese Sales Market: The rise of Chinese EV makers catering to local preferences has forced European companies to lower their prices in China, as they struggle to sell as planned. '''The Chinese market is becoming more challenging for European OEMs as Chinese competitors improve and nationalism grows.''' | ||