European car buyers are pulling out of the market, worried about higher costs and a deteriorating monetary record. As sales weaken, manufacturers, led through Volkswagen, would likely want to close plants to profitability.
Sales of electric vehicles have plateaued, just at the time they should be accelerating to meet European Union carbon dioxide elimination rules. Next year, the rules tighten, and are likely to precipitate a crisis. Automakers will have to forgo sales of profitable internal combustion engine-powered vehicles in favor of electric vehicles which are currently too expensive to generate big sales amongst Europe’s average wage earners.
The European Union may have relieved part of the self -induced tension by diluting the strict regime that requires that only electric cars buy up to 2035. The European industry does not make enough electric vehicles, but China has an excess. The EU, in defense of its industry, has increased prices lists in Chinese electric vehicles, but this exceeds its own anti-hell campaign.
The president of the European Commission, Ursula von der Leyen, declared after his re -election for a moment of five years on Friday, the purpose of finishing the CO2 emissions of the new cars until 2035. He alluded to allow the sales of cars of cars of Ice feed through the calls called E-Fuel after that date.
Meanwhile, sales of sedans and SUVs in Europe are expected to slow to 4. 6% expansion in 2024 to 19. 3 million, according to the IMC, which calls itself a Fitch answers company. In 2023, sales up 19. 2% as chain disruptions normalize cars that allow cars to catch up with an order backlog.
“The moderation of expansion rates will also be influenced through major borrowing costs, which are starting to have an effect on the broader economy. Although inflationary pressures have fallen, we expect a dovish call in 2024,” the BMI said in a report.
The BMI believes that Chinese costs will do a lot to make their sales of electric vehicles.
“The recent tariffs introduced by the EU on Chinese EVs will do little to stop these vehicles from entering the European market. Indeed, the introduction of Chinese EVs is expected to offer consumers more affordable EV options, which could stimulate demand,” BMI said.
BMI said sales of EVs have stagnated, rising “a mere” 2% in the first five months of 2024. Potential buyers were put off by constant price cutting which undermined EVs ability to hold their 2nd hand value.
In the first part of 2024, new car sales and SUVs in the EU exceeds 4. 5% to only 5. 7 million, according to the European Association of Automobile Manufacturers (ACEA). In June, EV sales fell from 1% to 156,400 for a market percentage of 14. 4%, in opposition to 15. 1% last year.
Globaldata has tirelessly reduced its sales forecasts for Western Europe. A few months ago, I expected an expansion of 4. 9%. Its last predicted 1. 6% sales expansion in 2024 to 11. 74 million. Last year, sales exploded to 13. 9%.
“We have more and more cautious with the result of the full year, since the costs of the vehicle remain the most important and the cuts of interest rates will be modest, even if the financial flexibility of the ECB has now begun. However, we continue to assume The expansion of 2024, after experiencing the expansion market market in the first part of the year, “Globaldata said in a report.
Western Europe includes the big five markets of Germany France, Britain, Italy and Spain.
Germany is the largest market for European cars and, according to IFO industry surveys, the commercial climate has deteriorated in June.
“Like the German economy in general, the German automotive industry does not seem able to assume the impulse,” said Anita Woelfl, IFO analyst, in a statement.
The auto industry faces huge challenges, according to Woelfl, including digitalization, autonomous driving and electromobility.
Some German brands (photo through Bildquelle/Ullstein Bild Getty images)
“The transformation of the German automotive industry is a huge task for manufacturers, particularly suppliers,” Woelfl said.
The weakening of European industry will provide uncomfortable decisions for manufacturers. VW plans to close a factory in Brussels, which would mark its first factory closure in Europe, according to the Financial Times’ Lex column. Possibly it would not be a negative in the long term.
“The fear that cars can embark on a renewal of the preference to recover the volumes of why the sector is negotiated with a benefit for six times. The closure of the plants, although painful, can be a sign that the sector is well suffering with the harsh realities of their difficult situation, “Lex said.
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