VSt’s a tradition at Peugeot. In this austere house, founded in the 18the century, a stone’s throw from the Swiss and German borders, we have always been wary of anything coming from the East. The big affair of Jacques Calvet (1931-2020), emblematic boss of PSA from 1984 to 1997, was the resistance to the Japanese invasion. His distant successor, Carlos Tavares, is fighting against the onslaught of China. Not a day goes by without him warning on the “red carpet” that Europe is rolling out under the wheels of Chinese manufacturers.
Just like Jacques Calvet, who castigated Europe as incapable of erecting barriers high enough to contain the Japanese assault. Europe negotiated sales quotas with the Japanese. The latter, in return, have deployed factories in the United Kingdom, Spain and even France. French, German and Italian manufacturers resisted, modernized and largely outsourced. They survived.
Will it be the same today, when Chinese cars gather by the hundreds of thousands in the Belgian port of Antwerp, like horsemen before battle? The danger is just as existential as in 1990, but it is of a different nature. At the time, the revolution was productive. The Japanese industry had a considerable lead in terms of production processes, productivity and manufacturing quality.
Today, the revolution is technological. The climate threat has led states to accelerate the transition from thermal cars to electric ones. In less than five years, the global market for “wattures”, which represented 2% of sales in 2018, has multiplied sixfold. It is expected to exceed 20% in 2024, according to the International Energy Agency (IEA). However, these vehicles are completely new objects which have led to two changes that European manufacturers did not sufficiently anticipate.
Price barriers
The first is the arrival of new players from the world of electronics, mastering the science of algorithms and semiconductors better than them. The most emblematic are the American Tesla and the Chinese BYD. Tesla developed in the world of Californian start-ups, from which its boss, Elon Musk, came. BYD is a telephone battery producer from Shenzhen (Guangdong), the “Chinese Silicon Valley”, just outside Hong Kong. Now, more than half of a car’s value is made up of its batteries, electric motors and software. European attempts by Volkswagen, Stellantis and Renault in these areas are still in their infancy.
You have 29.27% of this article left to read. The rest is reserved for subscribers.