What motivates automakers outside of Europe? • Parlay Game

Car manufacturers quickly followed one another to end some of their activities in Europe. Nissan is the latest: on Tuesday, he confirmed he would stop assembling Infiniti cars in his factory located in the north-east of England.

In the heartbreaking debate between Britain and its withdrawal from the European Union, Brexit, the question was asked: Does Brexit force British industry to pull out the automotive sector? ?

It is not so simple. Traditional car manufacturers, in Britain and throughout Europe, have been hit by armed forces around the world, and they determine where they want to build the next model of cars every few years or so.

In allocating resources, manufacturers have balanced the need to react to these changes and to justify the production of cars in places like Great Britain.

Here are some of the forces that are reshaping the industry.

In the wake of Volkswagen's 2015 diesel fraud scandal, which used software to cheat emissions tests, awareness of the harmful effects of fossil fuels has led to stricter regulation across the continent.

Some German cities banish older diesel engines with the aim of reducing pollution in urban areas. London introduced a tax on older diesel drivers. Britain and la France plan to phase out sales of new diesel and gasoline cars by 2040.

In the meantime, more governments, drivers and car manufacturers rotate towards electric vehicles. Alternative fuel cars accounted for 6% of new car registrations last year in Europe, up from 4.8% in 2017, according to JATO, a research firm in the automotive sector.

Norway aims to sell only electric cars by 2025, while India aims to be fully electric by 2030.

Car manufacturers are running to answer. Volkswagen announced Tuesday its intention to sell 22 million electric cars over the next 10 years, compared to its previous target of 15 million, and that its goal would be to become carbon neutral by 2050.

The investments needed to build electric cars have increased cost pressures for car manufacturers, which in some cases have struggled to generate profits in Europe.

In justifying the closure of its Swindon plant, Honda has said it wants to focus on electrification. "The significant challenges of electrification will cause Honda to review its global manufacturing operations and focus its activities in areas where it expects to have high production volumes," the company said.

While builders are spending billions of dollars on acquiring some of the electric car market, many are turning to China, which is the largest manufacturer and seller of electric cars in the world.

China says that one in five cars sold works with an alternative fuel by 2025, and officials said the country would be getting rid of internal combustion engines in new cars. The country's rules also require automakers to sell more alternative-fuel cars if they want to continue selling conventional models.

This has led automakers to realign where they build and develop cars.

You're here opened a factory there. Volkswagen has signed an agreement with the Anhui Jianghuai Automobile Group last year to develop an electric vehicle. General Motors did China the hub in the field of research and development of electric cars, while Renault-Nissan and Ford have joint electric car companies in China.

In their efforts to capture a growing market share of electric cars, traditional automakers are competing not only with each other, but against technology companies as well.

Uber, Alphabet and Tesla inject money into electric cars and autonomous cars, while changing the way people travel thanks to transportation services.

This has encouraged rivals to team up or work with technology companies to not be left behind.

  • Ford and Volkswagen formed in January an alliance to share the technology of electric and autonomous vehicles and save money.

  • BMW and Daimler announced in February that they would collectively invest € 1 billion in a joint venture that specializes in providing services such as carpooling and electric charging stations.

  • Audi, BMW and Daimler have joined forces to buy a digital mapping company. Daimler's is associated with Uber on autonomous vehicles.

  • BMW works with the Intel chip maker and Mobileye, an Israeli technology company, to develop an autonomous car. It's also part of a partnership with IBM to use artificial intelligence to tailor vehicles to their owners' preferences.

  • Fiat Chrysler works with Google on autonomous cars, General Motors has invested 500 million dollars in Lyft, and Volvo supplied the chassis for Uber driverless car tests.

This change accelerated change and increased costs, said Peter Wells, professor at the Center for Automotive Industry Research at Cardiff Business School in Wales. And this has led companies to question whether or not they should continue in markets that should not develop and may become more difficult to service.

"Companies around the world need to re-evaluate their positions," Wells said.

The European car market is not developing. Annual car sales peaked at about 16 million in 2007. They are at about 15 million now, according to JATO.

It is also a saturated market, dominated by European brands, which favors smaller cars. Builders eager for profits from vans and S.U.V.s look elsewhere for growth. Sales of S.U.V.s in Europe are still far behind those of China and the United States.

The Italian-American society Fiat Chrysler In February, he announced his intention to expand his capacity in the United States by modernizing several plants. They will produce great Jeep models.

Of course, even promising regions face challenges. In the United States, many believe that car sales have peaked, forcing some plants to idle. And the economic slowdown in China has brought down car sales.

But by announcing its withdrawal from Western Europe, Infiniti has announced its intention to focus on its US. in North America and its new models in China.

In this context, the uncertainty surrounding the departure of Britain from the European Union makes business planning difficult. Several automakers have announced that they will temporarily close their plants after leaving the country in order to adapt to the disruptions that may occur.

The fear is that Brexit could wreak havoc with carefully choreographed choreography just in time production process in assembly plants. In Great Britain, more than half One of the components of the cars comes from the European Union. It penetrates perfectly on trucks of the continent and arrives a few minutes after the installation of the final product.

After Brexit, these trucks could experience significant delays if they had to pass through customs checkpoints. Without a clear idea of ​​where Britain will leave in the next two weeks, it is more difficult to plan production in a few years. Investment in the UK car industry dropped by half last year.

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