Service for copy trading. Our Algo automatically opens and closes trades.
The L2T Algo provides highly profitable signals with minimal risk.
24/7 cryptocurrency trading. While you sleep, we trade.
10 minute setup with substantial advantages. The manual is provided with the purchase.
79% Success rate. Our outcomes will excite you.
Up to 70 trades per month. There are more than 5 pairs available.
Monthly subscriptions begin at £58.
Amidst the onslaught of cheaper vehicles from Chinese competitors challenging them on their home ground, Europe’s car manufacturers and their already-stretched suppliers are facing a challenging year as they hasten to reduce costs for electric models.
A significant question arises regarding how much further Europe’s automakers can pressure suppliers, who have already initiated workforce reductions, especially as many smaller companies continue to struggle with supply chain disruptions caused by the pandemic.
This week’s Geneva car show, returning after a four-year hiatus due to the pandemic, will vividly illustrate the contrast between Europe’s traditional automakers and the more electric vehicle-focused Chinese manufacturers.
Among the major companies hosting media events are France’s Renault, along with China’s SAIC and BYD, both of which are among several Chinese automakers targeting the European market.Renault will unveil its electric R5, while SAIC’s MG brand will showcase its M3 hybrid.
Additionally, BYD’s Seal sedan is a finalist for the Car of the Year award, potentially making it the first Chinese model to receive this prestigious accolade.
While European automakers depend on external suppliers with distinct supply chains for fossil-fuel and electric components, their Chinese counterparts are extensively vertically integrated, handling nearly all production in-house to maintain cost efficiency.
This integration enables them to offer lower prices than their European competitors. For instance, in Britain, BYD’s electric Dolphin hatchback is priced at £25,490 ($32,300), approximately 27% less than Volkswagen’s comparable ID.3 model. Tesla operates on a similar principle.
The challenge has become more daunting due to a slower-than-anticipated transition to electric vehicles (EVs), leaving traditional automakers with their dual supply chains. Recent data revealed a significant decline in EU fully-electric car sales in January, dropping by 42.3% from December.
Both Renault and Stellantis have emphasized their efforts to reduce EV costs this month, while Mercedes has tempered expectations for EV demand and announced plans to continue updating its conventional lineup well into the next decade.
Stellantis CEO Carlos Tavares has taken a more assertive stance, informing suppliers that since 85% of EV costs are associated with purchased materials, they must share a proportional responsibility for cost reduction.
This week, nickel and aluminium prices have experienced an increase as Western nations expanded sanctions lists targeting Moscow. This underscores the ongoing risks to raw materials prices, despite the absence of explicit mentions of these two metals in the sanctions.
Reduction in Workforce
Numerous established suppliers are feeling the pressure of cost reductions, with recent announcements or alerts about layoffs from Forvia, Continental, and Bosch. Further layoffs are anticipated.To protect their profits amid the recent semiconductor shortage, automakers focused on producing higher-margin models.
However, this led to reduced revenue and fewer opportunities for their suppliers.Industry experts now indicate that well-funded larger suppliers can adapt to this changing landscape. Nonetheless, they caution that many smaller suppliers are precariously positioned, as evidenced by Germany’s Allgaier, which filed for insolvency in July.
This implies that European automakers must carefully navigate between reducing costs to compete with Chinese rivals and ensuring they do not overburden their suppliers. Philip Nothard, insight director at dealer services firm Cox Automotive, suggests that automakers might need to intervene to rescue struggling suppliers.
To have the best trading experience with us, open an account at Longhorn
- Broker
- Min Deposit
- Score
- Visit Broker
- Award-winning Cryptocurrency trading platform
- $100 minimum deposit,
- FCA & Cysec regulated
- 20% welcome bonus of upto $10,000
- Minimum deposit $100
- Verify your account before the bonus is credited
- Over 100 different financial products
- Invest from as little as $10
- Same-day withdrawal is possible
- Fund Moneta Markets account with a minimum of $250
- Opt in using the form to claim your 50% deposit bonus
