00:00Electric car sales are proving resilient despite a weakening global car market.
00:05They rebounded in the second quarter, up 35% compared with the first three months of the year.
00:12Sales reached record levels in 50 countries, including Brazil, India and South Korea.
00:18EV sales are now expected to reach 29% of total car sales worldwide this year.
00:25That's one percentage point higher than had been projected in the global EV outlook.
00:30China leads the world in the sale and export of EVs.
00:34Chinese customers are also pivoting to domestic EVs, and this is hitting the European auto sector.
00:40German automaker BMWs has a steep drop in sales in China,
00:45and a hit to consumer confidence because of the Middle East crisis was behind an almost 35% plunge in
00:52second quarter net profit.
00:53Vehicle deliveries in China were down nearly a third.
00:56BMW is planning to axe 8,000 jobs by the end of next year.
01:01Stellantis' European operation remains in the red despite a global return to profit.
01:07Second quarter revenues were up 13%.
01:09The group, which owns Jeep and Fiat, says this was due to strong sales in North America.
01:15Stellantis and China's Leap Motor are starting joint car production in Europe later this year.
01:20Renault, however, recorded a more than 9% rise in first-half revenue and swung back to profit thanks to
01:27strong electric vehicle sales.
01:29The French carmaker says it has no need to cut its European capacity despite growing Chinese competition in the region.
01:35It does have a strategic partnership with Geely in Latin America.
01:39Well, let's get more on this.
01:40Daniel Harrison is an automotive analyst at Ultima Media.
01:44Daniel, thanks for joining me.
01:45Chinese automakers are capturing a bigger share of the European market faster than analysts expected.
01:51What do you think the reason is for this?
01:54Yeah, good to speak with you.
01:56There's many reasons.
01:57Fundamentally, the cost base for producing vehicles for legacy automakers in Europe is much, much higher than new startups in
02:08China.
02:09So much so that many of the European manufacturers have abandoned producing entry-level or A-class vehicles that are
02:18affordable to consumers.
02:20And China has seen an opportunity here.
02:23There's a gap in the market that those manufacturers are not catering to those consumers with a modest budget.
02:32And China is now starting to flood the market with affordable vehicles.
02:36So they've really stolen a march there.
02:39While Chinese companies are doing well, the European ones are struggling.
02:43We're hearing about layoffs at the likes of BMW.
02:45What do you think the key reason for that?
02:46Is it competition from China or is there other reasons too?
02:50There's multiple reasons.
02:51So the first primarily is that up until over the past 20 years or so, China has been a huge
02:59export market for many European OEMs, particularly Volkswagen, BMW, Mercedes and Porsche, companies like that, and also to the U
03:08.S.
03:08So on China, because the competition from domestic Chinese manufacturers has matched or even improved upon the quality of European
03:19manufactured vehicles, they're drastically losing sales there.
03:23And in North America, because of the tariff implications, European manufacturers are struggling to export as much there.
03:29So they're being hit on both fronts there.
03:32But also, as I said, the much higher cost space makes it much more expensive to produce vehicles in Europe.
03:39In fact, that's why Volkswagen and many other players have set up joint ventures and plants in China to produce
03:47vehicles much more cheaply.
03:48And in some cases, including Tesla, are actually exporting them back to Europe.
03:53I was going to ask you about these joint ventures like the one with Stellantis and Leap Mocha.
03:58Do you think they are the future of the car sector in Europe?
04:03Yes, very likely so.
04:05I think they're not the entire solution, but they're probably the least worst option.
04:10The alternative, unfortunately, would be that you'd have to close some pretty flagship plants across Germany, primarily Volkswagen, BMW, Mercedes,
04:24but also Stellantis, possibly, and Renault.
04:27And that would be very painful in terms of job losses and the loss to GDP and the impact upon
04:34the economies more broadly.
04:35And European automotive is a pretty vital pillar industry across Europe, and we're pretty proud of it, particularly in Germany.
04:42It's a great export market.
04:45And it's, you know, that's why the European Union is very keen to hold on to that, hence the tariffs
04:54that they've introduced, to try and hold back that tide of Chinese impulse.
04:58Thank you, Daniel.
04:59Daniel Harrison, Automotive Analyst at Ultima Media, and back to you, Sally.
05:04Thank you very much.
05:05Siobhan.
05:05Thank you very much.
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