Quote (ofthevoid @ 2 Sep 2024 18:49)
I think the market conditions in regards to rates apply to everyone though. The real challenge for German auto makers is the rapid rise of Chinese exports coupled with home energy prices going through the roof for a wide range of reasons. Probably general slowing demand in the west, as well as over betting on EVs play a big role too.
I think German car makers have permanently lost emerging markets (maybe they still have a foothold with the wealthy/premium product segments), they simply can't compete with China on price. Only way Germany, Canada, US, etc survive is through protectionism, that's why you're seeing these massive tariffs go up on Chinese auto exports.
Agreed. I think I've written about this before, but this is all part of China's long-term strategy and our greedy corporations fell for it like flies in a Venus flytrap...
1. China becomes a booming growth market.
2. Western car companies make an increasing share of their overall revenue and profits in the Chinese market.
3. The rise of China coupled with the stagnation of the West goads Western car companies into a critical dependency on the Chinese market, pulling out of it is no longer possible.
4. China imposes regulations, ostensibly due to pollution concerns, which effectively force a phasing out or ICE cars with a deadline in the late 2010s/early 2020s.
5. Since they critically rely on the Chinese market and a dual track R&D is too expensive, most Western car makers have no other choice than to give up on fossil cars and take part in the EV craze.
6. This transition to electric mobility devalues the century-old technological know-how on which the business model of the Western car makers, as well as significant chunks of the wealth of their nations, was based.
7. With the technological playing field leveled, the Chinese car manufacturers can leverage their cost advantages (cheap labor and energy, lower bureaucracy, short supply lines) to outcompete their Western rivals in the new EV market. First in China itself, then also in the Western markets.
Tariffs can slow down or perhaps even stop the last step, but the Chinese market is lost for Western car makers, which is a huge problem for them in and off itself. And most of the Western governments, think tanks, media and institutions are thoroughly infested with the climate agenda and will thus push for the electrification of individual mobility. How long will they be able to keep up high tariffs on cheap Chinese models while the domestic models are unaffordable for lower-income folks and old fossil cars are increasingly banned via sneaky regulations?
This post was edited by Black XistenZ on Sep 2 2024 12:53pm