Logistics Automotive Europe 2015: The future of the automotive industry
Stimulating growth The future of the European automotive industry.
Nothing unites Europe more widely recognized that its cars as the birthplace of the automobile, over the decades, Europe has embraced the automobile, not only as a means for economic growth and transport, but leisure and fun too.
The road traveled by the automobile industry in the EU European Union has not always been smooth in the latter part of last century, but other heavy industries have been victims of competition from Asia and the American automotive production is one of the region most sustainable industrial activities, according to the European automobile manufacturers Association ACEA.
The latest ACEA figures released Friday showed that new car registrations in Europe marked their 31st consecutive month of growth in March, showing that the automotive and consumer is one of the most robust and resistant industries of the European Union.
In March 2016, new car registrations in the EU rose by 6 percent compared to March 2015, reaching more than 1 to 7 million units in volume, this result is close to the levels in March 2007, just before the economic crisis has hit the automotive industry, the ACEA is noted.
Giving Europe a rare occasion for rejoicing among the major markets, Italy saw a 17-4 percent increase year-over year, France increased from 7 to 5 per cent and the United Kingdom 5 3 to percent increase car registrations fell slightly in Spain and Germany in the same month last year, but ACEA noted that, with the fall of Easter in March this year, the number of days sales declined Meanwhile, emerging economies such as Latvia and Lithuania have experienced huge increases of 25 5 percent and 28 8 percent, respectively, and Cyprus saw the largest increases in the EU, with registrations up 37 percent 1.
But while the numbers match, the European car industry is still hostage to the economic and political situation in the region.
Of course, automobile production in Europe is nothing new with the industry being one of the oldest sources of exports and employment in the region.
Acea calculates that 21 percent of all cars in the world are manufactured in the EU and 12 1 million people in the 5 6 percent of the EU's labor force work directly or indirectly in EU car sector producing Feb. 17 million cars, vans, trucks and buses per year.
The latest available figures from ACEA show that in 2014, sales of new motor vehicles are 14 4 million in the EU, trade with the European car knows what the body called a trade surplus of 95 1 106 billion 9 billion.
Names like Volkswagen Opel and BMW stand for the European automotive industry and, in particular, German; their brands embody values such as good quality materials and workmanship.
But an example of headwinds EU automotive policies can sometimes encounter was seen in September last year.
VW, one of the most revered names in carmaking, was hit by scandal emissions last year that shook the global corporate image and credibility But after a series of high-level changes and the reorganization, the company seems to have weathered the storm with VW group sales including Volkswagen, Audi, Skoda and SEAT brands in the EU increased by 8 percent in February from the same month last year .
Similarly, France and Spain made good car identity Peugeot Citroen and Renault SEAT despite being a subsidiary of the VW Group are the names of German households and a key element of these countries economic identities.
Sitting, for example, a thriving car whose history reflects the political and economic upheavals of the 20th century in Europe However, it also reflects the ability of its member states to cooperate in the industry and for its industry to survive, adapt and thrive despite the euro zone financial crisis for Spain, caused the partial collapse of its banking sector in 2012.
SEAT was founded in 1950 as an industrial holding company owned designed to power Spain a country reeling from civil war in the 1930s and World War II until 1945 - that was late other 1 properties with only 3 per 1000 population at that time.
Thus, the Turismo de Automóviles Española Sociedad of the Spanish tour car company or a seat for short, was born and partnership with FIAT Italy - and a more established and experienced company - was signed, giving birth to a successful partnership lasted several decades until the 1980s, when the relationship began to fall apart.
Finally, in 1990, having gradually increased its share in the company in recent years, the VW Group Germany has increased the amount of shares it held in the seat 99 to 99 percent.
Over the past three years, sales have accumulated 25 percent growth, almost 80 000 vehicles more than in 2012 -Place.
Thank you to its foreign ownership, SEAT has strong reasons to be optimistic about the future Fast forward to 2016 and SEAT has returned to profit after a rocky patch during the crisis years.
Over the past three years, sales have accumulated 25 percent growth, almost 80 000 vehicles more than in 2012, the company told CNBC, and in 2015, sales exceeded the 400,000 vehicle barrier, result of which was the result of a sales recovery in Spain and Italy, the fifth consecutive year of growth in Germany, the main market for SEAT and its best sales result in Switzerland, Denmark and the Czech Republic.
The company's importance to Spain goes beyond its direct contribution in terms of jobs, with SEAT tell CNBC that the company is one of the main pillars of Spanish industry and the main business sector automobile.
The company is a major employer in Spain and beyond with the SEAT Group employs 14,000 people worldwide, with many employees in Spain, particularly its three production centers in Barcelona, El Prat de Llobregat and Martorell.
SEAT represents about 1 percent of GDP of the Spanish gross domestic product the company said, adding that many small businesses depend on the production of SEAT which directly or indirectly employs about 70 000 people.
So with sales booming cars for manufacturers such as SEAT, what could go wrong For starters, Europe's recovery, or more precisely, the euro area s, is not established that the industry experts provide a smooth before driving.
Countries of the euro zone saw growth rates and employment slowly improving but the economy as a whole continues to operate in a low-inflation environment with consumers remain cautious about making major purchases.
SEAT has told CNBC that if the automotive sector is clearly recovering in Europe, there was no room for complacency, saying he is closely monitoring the economic situation in Europe even if it trusts that the recovery would remain stable.
SEAT needs to focus on markets where it is already present and provide a high contribution margin, and where it still has a significant growth potential This means that the concentration in Europe.
Analysts agree that Europe is not yet out of the woods and while the automotive industry is one of the strongest sectors, it faces pressure from other parts of the regulation, the uncertainty of investment and profitability, global competition and uncertainty on the prospects for the region.
For example, European manufacturers had to comply with European regulations to reduce greenhouse gases and the latest regulations require that new cars registered in the EU will not emit more on average by 2015 130 grams Display CO2 per kilometer European car manufacturers could be ahead of the game, the average emissions of new cars sold in 2014 was 123 g 4 km of CO2.
ACEA said that European cars are the cleanest in the world with the engine of the average car emits 28 times less carbon monoxide today there are 20, he adds that the new car has become today average more fuel efficient, consuming 15 percent less fuel per 100 km than it was 10 years.
Although emissions regulations helped spur the EU green credentials, it became a source of contention for some European car manufacturers, or rather their investors, according to an automotive equity research analyst.
It is clear that the industry is important to the national and regional economies, trade and employment, but they are all taken to make money in Europe -George Galliers Global Automotive Research Team Evercore ISI.
George Galliers the Global Automotive Research team Evercore ISI, told CNBC that if the industry had shown strong, investors might argue that in terms of profitability and return on capital, the automotive industry is one facing a constant struggle and it is never attended emission regulations more.
It is clear that the industry is important to the national and regional economies, trade and employment, but they are all taken to make money in Europe, he told CNBC.
You are looking in an industry where operating margins are 1-3 percent in Europe, at best, he says, it's not a very profitable business and it is difficult to see how margins operating can reach about 5 percent during the cycle, and it's not really that attractive prospect for investors.
Galliers said that the regulation of increasingly added to the automakers struggle emissions when it came to profitability regulations requiring more technology to add to the cars themselves at additional cost.
All manufacturers are scrambling to find efficiencies and cost savings elsewhere and long term, it is difficult to see where this battle could end and ultimately, it is the investment community, shareholders who often end up wearing this burden.
Other potential risks on the horizon in the automotive industry include a referendum on accession to the EU will be held in the UK in June referendum casts a shadow over other auto plants in the country since a vote to leave could drive the cars of workers in the UK and automakers, they work for, from VW BMW, Opel Tata Motors, into uncharted territory.
Despite being German at heart, BMW states on its website that the UK is the only country where the BMW Group is represented by production plants for all three premium brands MINI, BMW and Rolls-Royce Motor Cars .
Furthermore, he claims that 2 billion contributing $ 1 1 69 billion a year directly to GDP gross domestic product of the United Kingdom, supports more than 46,000 jobs in the UK and has invested $ 1 75 billion in in the stage production of the country since 2000 Finally, said only 2 4 billion dollar car, engine and related exports from the United Kingdom each year.
A possible Brexit could put a spanner in the works if the majority of the vote of the British public to leave the EU, the future of EU trade in the UK, customs duties on import and export, employment rights and production costs could all be subject to a period of uncertainty and change.
As a major employer, exporter and investor, the BMW Group is committed to U K which houses two of our brands, MINI and Rolls-Royce Motor Cars -BMW.
BMW did not relish the prospect of a referendum, telling CNBC that he would prefer that the U K remains a part of the EU.
As a major employer, exporter and investor, the BMW Group is committed to U K which houses two of our brands, MINI and Rolls-Royce Motor Cars, the automaker told CNBC.
Our experience shows that the free movement of components, finished products and skilled workers within the EU is extremely beneficial for UK based companies We firmly believe Britain would be better if she remained an active and influential member of the EU, the development of European regulations continue to impact the UK whatever the decision in June.
BMW declined to comment on what a Brexit could mean for its operations in the country.
Like most industries, the automotive industry is now looking to keep ahead of the changing needs of consumers and technological advances, as well as maintaining profitability, keeping in accordance with regulations and stay ahead of the competition.
While most analysts are cautiously optimistic about the future of the automotive production industry in Europe, some like Anil Valsan, the lead auto analyst at EY, believe that Europe still has some years to go before it recovers its volume of pre-crisis sales.
So far, we talked about car sales but there move happening in what consumers really want and that is to do with access to mobility as a service -Anil Valsan, senior auto analyst, EY .
Valsan told CNBC that while Europe offered sufficient incentives to encourage innovation and research in technology, with countries like Germany, France and U K encourage the development of self-driving cars vehicles manufacturers needed to position itself for the future of the car consumption.
So far, we talked about car sales but there move happening in what consumers really want and that is to do with access to mobility as a service, he told CNBC.
Yes, in the future there will be vehicle manufacturers in Europe, but the question is who will buy Do you and I as consumers want to buy a car is in the driveway 95 percent of the time or would we pay more for access to mobility as a service to someone else and have run more efficiently.
Valsan said that many start-ups have already targeted the new business models when it came to consumer use cars and that big, traditional automakers needed to decide how to position themselves in this model the changes in consumption.
They must decide whether they want to own the relationship between the consumer and that access to mobility or to be only the manufacturers of these unmarked vehicles, said Valsan.
With many innovative companies pathways cars are accessible and used by the company, the automotive industry must be prepared to adapt to the future, he added.
We will not see the cars go, but we'll see who has them and how we interact with them is changing the land open game now.
Writer Holly Ellyatt design, code and visualization of Bryn Bache Editor Phill Tutt data.
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