V8 + PHEV = Auto’ Oxygen (For Now)
The new boss of Stellantis said it bluntly: place a V8 into a truck and it flies from showrooms. So RAM has resurrected its big engines for its Maga type buyers. More modestly, Brussels is trying to make European car manufacturers marginally happier by changing how emissions are computed for PHEV (rechargeable hybrids) and dropping some of the regulations that make city cars unaffordable. These are welcome moments of clarity to an industry hammered by a trifecta of Chinese competition, European excessive regulation and ignominious US tariffs.
The Munich motor show suggested additionally that European players have finally reacted to the Chinese and Tesla EV onslaughts. Their latest releases are akin to media centers on electric wheels, which are already significantly pleasing Chinese buyers, and would most likely attract western buyers too. It is a vindication of Chinese car competences.
The temptation is to conclude that the industry is out of the woods (see performance chart), as it non longer loses in market cap terms. VW is now regarded as the proof that even a dinosaur can eventually react, with better sales signals coming from its volume offerings (VW brand, Skoda, Seat).
Not quite crushed: Autos
However, declaring the pain is behind the sector, is a demanding statement:
- The tariff situation is still such that exports to the US are 15% dearer
- Brussels is proving more flexible short term, but the target to get rid of ICE based cars has not changed, only the speed of travel has
- Chinese manufacturers churn twice as many cars as European ones and benefit from phenomenal creative energy as non legacy players, not to mention that prices are falling fast (China is in deflation).
There is some good news though: governance renewal. Stellantis and Renault have new bosses, VW will put a stop to Mr Blume’s dual CEO act, and Ferrari’s boss is still fairly fresh in the job. New blood is always welcomed.
Do we feel an urge to test the sector again? No. VW made a justified comeback of late, but it should not be construed as a sector epiphany.
The Munich motor show suggested additionally that European players have finally reacted to the Chinese and Tesla EV onslaughts. Their latest releases are akin to media centers on electric wheels, which are already significantly pleasing Chinese buyers, and would most likely attract western buyers too. It is a vindication of Chinese car competences.
The temptation is to conclude that the industry is out of the woods (see performance chart), as it non longer loses in market cap terms. VW is now regarded as the proof that even a dinosaur can eventually react, with better sales signals coming from its volume offerings (VW brand, Skoda, Seat).
Not quite crushed: Autos
However, declaring the pain is behind the sector, is a demanding statement:
- The tariff situation is still such that exports to the US are 15% dearer
- Brussels is proving more flexible short term, but the target to get rid of ICE based cars has not changed, only the speed of travel has
- Chinese manufacturers churn twice as many cars as European ones and benefit from phenomenal creative energy as non legacy players, not to mention that prices are falling fast (China is in deflation).
There is some good news though: governance renewal. Stellantis and Renault have new bosses, VW will put a stop to Mr Blume’s dual CEO act, and Ferrari’s boss is still fairly fresh in the job. New blood is always welcomed.
Do we feel an urge to test the sector again? No. VW made a justified comeback of late, but it should not be construed as a sector epiphany.
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