2020 is going to be a challenging year in Europe

2020 is going to be a challenging year in Europe

If you don't like gloomy, if realistic, forecasts, look away now.

Our chief analyst Dave Leggett has been crunching the 2019 numbers to report West European new car registrations were up 20.6% year on year in December - an impressive gain, but there were special factors at work. A weak December 2018 explained part of the strong December gain, but a relatively strong selling rate - close to 15.3m units - suggested some pull forward in sales prior to the 2020 CO2 targets that will apply in the EU. Despite December's jump, the underlying demand trend suggested a decline to the market is in prospect for 2020.

The shift away from internal combustion engines to e-mobility could cost as many as 410,000 jobs in Germany by 2030, according to the results of a German government-sponsored study reported by the Handelsblatt newspaper. The  report echoed warnings from some German industrialists while some companies - such as Continental and Schaeffler - have already announced structural changes to plant and resource bases as part of the anticipated shift towards electric vehicles. The newspaper cited a report by the National Platform for the Future of Mobility (NPM), an advisory council for the government which said, in powertrain activities alone, some 88,000 jobs could go. The report noted that an internal combustion engine consists of at least 1,200 parts whereas an electric motor has only around 200 - meaning that e-mobility will entail less parts manufacturing activity.

Building on the RAV4's success as a pioneer of hybrid power among SUVs, Toyota is now ready to extend the benefits of the technology with the introduction of the new Plug-in Hybrid, a new flagship vehicle for its hybrid line-up that promises to be not only more powerful but also more emissions and fuel-efficient than any other in its class.

PSA Group is in a position to avoid EU penalties that would arise from exceeding tougher company fleet average CO2 targets in 2020, according to Citroen CEO Linda Jackson. OEM groups in Europe face a considerable challenge to meet the tougher EU fleet average CO2 targets in 2020 and face hefty fines if they fail to do so. Speaking to journalists this week, Jackson reiterated that the group was on track to meet its CO2 objectives on the basis of its strategic product planning. "As a business, we do not want to pay fines," she said. "And we will meet our objectives for CO2. We have many things in place to ensure that, not just simply selling more electric vehicles. It is also the mix of the other vehicles. It is also improving the technology of our existing petrol and diesel offerings to make sure they are even more CO2 friendly." I noticed Peugeot advertising the redesigned 208 on UK TV this week, with particular emphasis on the new EV version.

Geely's already nabbed Volvo Cars, will it add a premium English sportscar brand to its portfolio? We heard this week Zhejiang Geely Automobile Holdings was in talks to acquire a stake in struggling Aston Martin Lagonda Global Holdings, according to reports citing sources close to the company. The usually well informed Financial Times suggested Geely was in talks with the management of Aston Martin and other investors over the acquisition of a stake and the Chinese automaker was currently conducting due diligence on the 107 year old icon. Last month, Aston Martin confirmed it was in early stage talks with potential investors as it looked to raise funds following a disappointing financial performance in 2019. The company said it was "reviewing its funding requirements and various funding options".

Resilience Capital Partners said its portfolio company, Trialon, was acquiring the Customer Technology Centre Michigan of Delphi Technologies, which would expand its testing business. Located in Auburn Hills, Michigan, Trialon-Auburn Hills is a testing facility which includes more than 130,000 square feet of combined lab and office space. With the acquisition, Trialon adds additional testing capabilities including vehicle emissions, engine and chassis dynamometers, vehicle test lab, acoustics, materials and design and fabrication. Trialon-Auburn Hills also includes complementary testing capabilities to Trialon's Burton, Michigan and Kokomo, Indiana facilities' current capabilities of environmental, corrosion, vibration and EMC testing. 

Toyota this week announced the launch of Kinto, a new brand dedicated to offering mobility services to users across Europe. It said Kinto forms part of its global vision to 'evolve into a mobility company by providing all kinds of transportation-related services to people around the world'. It will include ride-hail services and replaces Yuko - which currently operates in several European cities. "Kinto is part of our strategy to grow our total European business," said Johan van Zyl, President and CEO of Toyota Motor Europe. "In markets where it can be viable and sustainable, adding mobility services to our traditional business model will allow us to respond to new customer needs and meet the emerging mobility requirements of cities and regions." In 2018, Toyota began building the foundations necessary to prepare its European organisation for the integration of new mobility services into its existing business of making and selling cars. Toyota established two entities, a fleet management company (Toyota Fleet Mobility, based in Cologne, Germany), and a digital platform company (Toyota Connected Europe, based in London, UK).

And how about an electric air taxi service? Toyota Motor has announced plans to invest US$394m in Joby Aviation, a California-based developer of 'flying taxis', as it looks to expand further into mobility services to help meet evolving personal transportation requirements globally. Earlier this month Hyundai Motor launched a similar project in partnership with US ride hailing company Uber, to develop and manufacture flying taxis for personal transportation.

From Our Man in Brazil: 2019 was quite good for the Brazilian auto industry although it could have been better. Last month, for example, daily average sales were the best in six years, topping 13,173 registrations. This resulted in industry and dealer stocks of 33 days in December 2019, down from 38 days in November, slightly below the 35 considered normal. The early forecast for 2019 signalled 11% to 12% growth but the 2019 books closed on 8.6%. The 2,787,858 units - light and heavy vehicles -  sold in 2019 were sufficient to move Brazil up from eight to sixth largest world market though still long distant from 2012's 3.8m which ranked the country fourth.

Have a nice weekend.

Graeme Roberts, Deputy Editor, just-auto.com

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