2024-12-03
8 分钟The Economist. Hi, John Priddo here.
I host Checks and Balance, our weekly US politics podcast.
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If the boardrooms of Europe's carmakers had similar systems, they would be lit up like a Christmas market.
Volkswagen or VW, the largest of the lot by sales, is bracing for strikes beginning on December 1st in response to its plan to close three factories in Germany and cut wages.
Northvolt, a once promising Swedish battery start-up in which VW and BMW invested, has collapsed into bankruptcy.
Meanwhile, across the Atlantic, Donald Trump is threatening to upend supply chains by imposing a 25% tariff on imports from Mexico and Canada.
These troubles come amid an already difficult year for Europe's auto industry.
Since April, the combined market value of the continent's five biggest carmakers by sales VW, Stellantis, Renault, BMW and Mercedes has plunged from more than 300 billion euros, that's 320 billion dollars, to below 200 billion euros, as a string of gloomy profit forecasts has spooked investors.
In Europe, demand has shrunk and competition is intensifying from Chinese electric vehicle or EV firms.
The pie has become smaller and we have more guests at the table," Oliver Bloom, VW's boss, has said.
At the same time, the overseas businesses of European carmakers have hit a pothole.
Sales in China have slumped and profits in America are under threat too.
Philippe Houchoir of Jeffreys, a bank, describes it as a downturn like no other, yet efforts to slash costs at home to stay competitive are hitting stiff resistance from unions and politicians.
Not long ago, European carmakers were on a tear.
A shortage of microchips during the pandemic helped them pursue a strategy of value over volume as they prioritised putting scarce chips into their most profitable vehicles.
VW broke its record for operating profit each year from 2021 to 2023.
Stellantis, whose largest shareholder, Exor, is a part owner of The Economist's parent company, generated its highest-ever revenue and profit in 2023.