Europe is losing ground in the automotive industry. Europe’s share of world car production will fall

The coronavirus pandemic will undoubtedly have a negative impact on European car manufacturers, as well as increasingly stringent emission standards. Will this jeopardize Europe’s position in world car production?

In 2030, Western Europe will account for only five percent of world car production, up from 15 percent last year. European manufacturers, including those from the Czech Republic, will be coping with the effects of the global pandemic and at the same time will have to comply with increasingly strict emission limits, which will lead to more expensive cars. This follows from the KPMG Global Automotive Executive Survey, which was attended by more than 1,100 executive managers from 30 countries, including the Czech Republic.

According to Jan Linhart from KPMG, Europe’s share in ten years may be even smaller due to the significant impact of the pandemic in the region. On the contrary, China, which accounted for 27 percent of production last year, will continue to strengthen.

“Europe is in a period of transition to introduce stricter emission limits, which will make cars more expensive. This is another blow that carmakers will find it difficult to cope with. The solution would be to postpone the validity of the new emission limits for several years, negotiations on this option are already underway. The drop can be even more than 30 percent if no measures in the form of postponement of new emission limits or support for the acquisition of new cars are taken, “said Linhart.

The market is awaiting consolidation, thus entering into new partnerships, mergers and acquisitions. Car bosses expect a dramatic reduction in the number of stores by 20 to 30 percent in the future, and the current crisis will accelerate this trend. In addition, more than 80 percent of managers believe that the role of showrooms needs to change as carmakers increasingly rely on digital channels, flexible contracts and data handling.

Not only the ability to recover from the post-covid recession will determine how the carmakers will fare in the long run. Access to natural resources will play a key role. China has the upper hand in this direction, which has at its disposal and controls raw materials for the production of battery cars.

Natural resources and politics will decide which drive to support the carmaker. The leaders of European carmakers are clearly focusing on battery electric cars (83 percent) and hybrid cars (80 percent), North American manufacturers want to continue investing in internal combustion engines (89 percent). This also applies to diesels, which thus remain an alternative in the future.

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