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Uzone.id – The global automotive industry is undergoing a major change at present. There is one event that has gained people’s interest and that is a rise in the exportation of electric cars from China to Europe.
The emergence of electric vehicles from the Bamboo Curtain country has posed a challenge to the European car makers, which before this had been the world’s leading automakers.
These are the following benefits of Chinese Electric cars:
What is unique with Chinese electric cars that trigger instances of consumer preference in the European markets? Several main factors include competitive pricing: China has comparatively cheaper brands of cars especially electric cars than the European brands.
This can happen because of efficiency in the production of electric cars and the Chinese government encouraging the use of electric cars.
On the technology development, Chinese battery makers may be new but they have developed their battery technology to be more sophistically advanced than others at the moment. Self-discharge capability of batteries as well as batteries with longer durability and lower manufacturing cost are both beneficial to customers.
Regarding the design, it can be said that the cars produced by Chinese companies now are no longer imitations and have their attributes. This is coupled with the fact that Chinese car manufacturers are beginning to shift their strategies more towards the design of their automobiles. The current electric car products coming out of China now have sleek and fashionable looks quite in line with their European counterparts.
Chinese-made electric cars also have some of the modern comforts including driver-assist technologies, internet services, and infotainment systems which are as advanced as those featured in the cars manufactured in Europe.
The effects of its on the European car industry are now beginning to be threatened.
However, it needs to be pointed out that the European automotive industry cannot remain unaltered as China increases its share of electric vehicles, and competition becomes even more acute.
European automotive producers have to experience growing competitive pressure from Chinese automotive producers. This in turn challenges them to go on developing their products and making them better.
Importing more electric cars from China could have implications for the automotive industry in Europe which could eliminate jobs. Layoffs might be inevitable if European manufacturers cannot compete with the prices, they set for their products.
Thus, what is going to be essential for European countries is to experience some changes in their industrial policies where competition comes from China. An example of a policy that can be probably thought of is a protectionist policy for domestic industries.
For instance, VW which was in the past decade one of the largest sales manufacturers in the world together with Toyota is rumored to shut down its car factory in Germany for the first time. This step is said to have been taken to minimize costs and expenses.
Reuters has said that Volkswagen is planning to shut down a plant in Germany for the first time due to competing pressure from Chinese automakers.
VW warned in a memo to employees that it was exploring options to shut down some of its German factories or halt the so-called workforce obligation program launched in 1994, which will secure job cuts until 2029.
For this reason, in the current situation, the company wrote in the memo, even factory closures of vehicle production and component sites cannot be excluded.
Volkswagen Group CEO Oliver Blume stated that European automotive was in a very difficult, or rather serious condition.
“It can be seen that ‘the economic environment is gradually becoming more stressful and new competitors continue to emerge in the European market. In particular, the competitiveness of Germany as a manufacturing site is declining,” said Oliver Blume.
Volkswagen group’s largest brand, Volkswagen is said to be among the first brands in the entire group to be subjected to cost-cutting measures. It has targeted to reduce its expenses by €10 billion by 2026 as it struggles to survive through a change of technology in the automobile industry by adopting electric vehicles.
Executives at the company’s workers’ council protested proposing to offer stiff resistance to the executive council plans. The board further stated that VW has stated that one large-scale vehicle plant and one large-scale components plant in Germany is outdated.
It is foreseen that by 2012 Volkswagen Group will have employed more than 700, 000 people while at the moment this number stands at 680, 000. VW said that it also had no option but to bring to an end its job security program through which the car maker committed itself to preserving the jobs of the workforce and had been very operational since 1994.
China’s electric cars’ incursion into Europe is both a threat and a competitive opportunity for automotive businesses around the world. On the one hand, higher competition is capable of pressing demand, creating new or improving existing opportunities to advance and optimize activities. On the other hand, this may endanger several European countries and their economies and create job losses.
To overcome this challenge, European car manufacturers have to undertake a radical shift – from developing automobiles to constructing business models. Furthermore, it is crucial to have the cooperation of the government, the industrial world, and society to achieve a sustainable shift towards electric mobility.
