Chinese electric car manufacturers are dominating events at the IAA in Munich. In China, Volkswagen, the long-standing market leader, is losing more and more ground. Two facts that show that the auto industry is changing – very quickly. Dark times for domestic car companies? Does Germany now have to orient itself towards China? What will happen to Tesla? Automotive expert Helmut Becker provides ntv.de with answers.
ntv.de: Mr. Becker, the car year 2023 was extremely exciting. What could 2024 be like?
Helmut Becker: 2024 will be even more exciting! What happens next in politics and in economics? Can Germany continue to weave its way through the crises on the left and right as before? How can the auto industry absorb everything that comes its way?
These are a lot of open questions…
True, and predictions are, as always, difficult. Nevertheless, despite all the uncertainty: the mainstream of forecasts is cautiously optimistic. I agree with that: weak growth, falling inflation, falling interest rates – after all.
So there will also be a difficult situation in the new year: Are you expecting external disruptive factors, perhaps from the political side? There are already elections in Taiwan in January, which could put a strain on the relationship between the USA and China – and then there will be the US presidential elections at the end of the year…
Since the beginning of the 2020s, we have had enough disruptive factors. They will still be virulent in 2024: war in Ukraine, war in the Middle East, for example. It is impossible to predict whether Taiwan and the presidential election in the USA will add to the series of crises. If China gets serious about Taiwan militarily and Trump wins the US election at the end of the year, anything is conceivable.
What could a US President Donald Trump mean for the global auto industry?
To put it briefly, succinctly and drastically: dramatic slump in production, sales and employment. In the end maybe even a serious trade war!
So should German companies fear a Trump election?
I guess so. Let us remember the slogan “America First” that characterized his last term in office. 80 percent of the German auto industry relies on exports. Even the primary effect of a disruption in foreign trade with China and the USA is enough to cause a recession. But it wouldn’t stop there: the negative secondary effects, i.e. the cascading consequences for the European partners and the rest of the world, would cause an existential crisis. This has to be said so clearly! Also to appreciate again what politics has been able to prevent to date, despite all the external shocks and pressures.
In general: How do you see German car manufacturers and suppliers positioned for 2024?
Definitely worse than 2023. Global competitive pressure is generally increasing. Chinese manufacturers are increasingly pushing into the global market. Prices fall and so do returns.
What should German industry representatives focus on? Where should your focus be?
In two ways: When it comes to electromobility, do what the Chinese have done on a broad front over the last 30 years – copy and enter into partnerships with car companies in order to transfer electric platform know-how. On the other hand, they should also keep the topic of combustion engines warm. We still have advances here that need to be expanded for the age of synthetic fuels that is sure to come.
Speaking of which: How will the German car sales market develop in 2024?
Around 2.83 million new registrations are expected for 2023. That is 6.8 percent more than in 2022. Since the overall economic and growth expectations have deteriorated, at best small growth can be expected for the German car market in 2024. The previous approval forecasts are correspondingly close to each other, ranging from 2.8 to 2.9 million on average. So 2024 won’t be a sure-fire success.
Get away from Germany. China is and remains the most important car sales market for the entire industry, political tensions or not. Electromobility is very important there. BYD is now the world market leader and is pushing into Europe. Will 2024 be the year of the Chinese car manufacturers?
China is putting around 25 million new cars on the road today, two thirds of which are still combustion engines. But China is the world market leader in electric cars and BYD in turn is the world market leader in electrically powered vehicles with 2.5 million – battery cars (BEV) and plug-in hybrids (PHEV) combined. BYD is now larger than BMW or Mercedes-Benz. Even if you only look at BEVs, BYD has now overtaken the electric car pioneer Tesla.
And BYD is heading to Europe…
Correct. BYD is not an isolated case: at least a dozen Chinese electric car manufacturers want to gain a foothold in the European market. Whether this attack will be successful remains to be seen. In the past, automakers from China regularly disappointed in Europe.
Where do you see their strengths?
Chinese car manufacturers learned extremely quickly – I was also wrong, ashes on my gray head. Their cars are now high quality and competitive; they offer smaller and cheaper cars for the mass market. But not yet so cheap that we would buy them in bulk.
Another forecast: Which car company could cause a positive surprise this year – internationally and nationally?
Internationally, alongside BYD, especially Hyundai. The South Korean manufacturer has quietly gained market share. Hyundai is very innovative, including in sales, as shown by its cooperation with Amazon. In Europe, I still see Skoda and Seat’s electric subsidiary Cupra as having a strong position.
And nationally?
Nationally, VW could and must surprise positively – also thanks to Skoda and Cupra.
How is the situation with the electric car pioneer Tesla?
It looks like Tesla’s heyday is over. There will no longer be growth rates like in the first few years, also because the models are now getting on in years. In general, the Musk Group’s model policy needs improvement. Only Model 3 and Model Y are really successful. The Cybertruck electric pickup, which has been available in the USA for a few weeks, is unlikely to be profitable for years. The starting price for the stainless steel monster is simply too high. In this country, you can only drive the Cybertruck with a truck driver’s license. That’s not really a selling point!
Thomas Badtke spoke to Helmut Becker