Since it invaded Ukraine, Russia has faced increasing sanctions from its foreign trade partners, particularly the US and Europe. Following the recent announcement of the US Treasury expanding its secondary sanctions programme, international pressure looks set to rachet up even further. However, the Russian economy seems to have broadly adapted to the new geopolitical environment and has seen signs of some recovery. In the Light Vehicle (LV) market, sales volumes are well on the way to recovery – after a near 60% drop in annual registrations in 2022, GlobalData estimates registrations to have grown by as much as 53% in 2023. The latest estimates for the Russian LV market show that new vehicle sales exceeded 675k units in the first half of 2024 – this constitutes a 78% improvement on the same period last year, an impressive figure compared to somewhat subdued results elsewhere in Europe. While some of this can be attributed to growth in GDP and domestic demand, this result indicates that the LV market has begun to adapt to the sanctions placed on Russia. We do not expect the market to grow as rapidly throughout the year, however, as much of this growth stems from a recovery from the low base of 2023.
ASEAN falling
Go deeper with GlobalData
In May, ASEAN Light Vehicle (LV) sales dropped by 5% YoY, marking the 10th consecutive month of declines. Recent data reveals that this downturn continued in June, with Thailand, Indonesia, and Malaysia experiencing slumps of -26% YoY, -12% YoY, and -4% YoY, respectively, during the month. Since these countries have together accounted for 73% of ASEAN LV sales this year, the overall ASEAN market is estimated to have dropped by 9.4% in June and 8.6% YoY in H1 2024.
Volvo and tariffs
Questions about EU tariffs took centre stage during Volvo Cars’ Q2 2024 results call, with president and CEO Jim Rowan giving reassurances that “it’s a short-term issue.” Particularly affected is the firm’s China-made fully electric SUV the EX30, which the firm announced would have its production moved to Ghent, Belgium. “We’re going to start to see the impact of that [tariffs] in the second half of this year,” Mr Rowan said. He did not give any clues as to whether pricing would change for the vehicle following the tariffs, instead adding that the firm was “in a strong position” and is “looking at all the options available.” Asked whether Volvo could quantify the expected impact of the tariffs, CFO Johan Ekdahl said that it “is an ongoing dialogue [with the EU Commission]. We don’t know the final outcome – which is important to emphasise.”
GM brand future
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataHow will GM manage diverging IC versus EV preferences in the US and China as it plans next generation Buicks and Cadillacs? two main own brands plus the three-way JV of SAIC-GM-Wuling make up the majority of the American OEM’s sales in the giant Chinese market. Buick has been the company’s own volume play for some years, with Cadillac also more successful in the PRC than it has been in the US. GM remains committed to an electric future in China – and eventually, North America too – but has to decide if it will continue making major investments in both EVs and gasoline-powered models. Some would say it has no choice but so far, the firm has held back on matching the bargain basement pricing of new electric and electrified models from multiple rival brands in China. And for that reason, Buick, Cadillac and Chevrolet sales have taken a major hit. This report looks at how General Motors might decide to proceed, highlighting certain cars, minivans/MPVs and SUVs. The most likely strategy appears to be a pullback (for now) on going all-in with EVs for Cadillac, instead offering hybrid/plug-in hybrid alternatives not only in North America but China too.
Harris worries
With president Joe Biden stepping down from the presidential race and endorsing Vice President Kamala Harris, the future of US climate policy — and its impact on the motor finance sector — could undergo significant transformation. Harris, known for her stance on climate issues and regulatory actions, could drive the US towards more stringent environmental standards and innovative financial mechanisms for the automotive industry. As vice president, Harris was instrumental in promoting the Inflation Reduction Act (IRA), the largest climate spending law in US history. The IRA aims to reduce greenhouse gas emissions by up to 42% below 2005 levels by 2030, with significant implications for the automotive sector. The legislation’s focus on clean energy and electric vehicle (EV) incentives aligns with the motor finance industry’s growing shift towards sustainable investments and green financing options.
Silicon boost
Could a different approach to battery design address key barriers to broader EV adoption? Leading international developer and manufacturer of advanced silicon anode materials for lithium-ion batteries, Nexeon, has developed battery materials that it says enable a significantly higher cell energy density. Higher density allows for the design of smaller and more cost-effective batteries which, in turn, leads to enhanced performance for several applications, including EVs where range and charging times can be improved. We spoke to Scott Brown, CEO, Nexeon, to learn more about the battery technologies the company is working on and the benefits they can potentially bring to EVs.
Disability challenges
One in five people in the UK live with a disability. It is predicted that the number of disabled disabled drivers, or passengers, in Britain could rise to 2.7 million by 2035. Alongside government regulations for the ending the sales of new ICE-only vehicles by 2035, these drivers will increasingly transition to EVs. However, disabled EV drivers face a number of additional challenges such as non-accessible charge points, difficulty in making payments, the inability to add ramps to vehicles and more. To assist with these pain-points, Motability Operations, the company that runs the life-changing Motability Scheme in the UK, has launched ‘Go Charge’, billed as a solution to simplify public EV charging for its customers. Partnering with tech company, Paua, ‘Go Charge’ provides a free app and card that streamlines the process of finding and paying for EV charging. It covers more than 70% of all rapid charge points across the UK. We spoke to head of innovation, Motability Operations, Jon Jenkins, to hear more about the assistance offered to disabled EV drivers, and the challenges they face.
Split, money back
Renault UK has promised prospective buyers of its Scenic E-Tech EV it is such the perfect family car to bring an end to in-car friction and offered money back if a couple splits up after buying one. There are, of course Ts & Cs.
Battery pact
PowerCo, Volkswagen Group’s battery firm, and QuantumScape have announced they have entered into an agreement to industrialise QuantumScape’s next-generation solid-state lithium-metal battery technology. Upon satisfactory technical progress and certain royalty payments, QuantumScape will grant PowerCo the license to mass produce battery cells based on QuantumScape’s technology platform. Under the non-exclusive license, PowerCo can manufacture up to 40 gigawatt-hours (GWh) per year using QuantumScape’s technology with the option to expand up to 80 GWh annually, enough to outfit approximately one million vehicles per year.
Its Q2 time
Ford second quarter 2024 revenue was up 6% year on year to US$47.8bn on “a slight increase in wholesales”. Net income was $1.8bn and adjusted earnings before interest and taxes, or EBIT, was $2.8bn with Ford, without provding comparisons, saying: “Profitability was affected by an increase in warranty reserves, though efforts to lift the quality of new products are starting to pay off.” Ford Pro’s second quarter EBIT was $2.6 billion, an increase of 7% and a margin of 15%. Segment revenue was $17bn, up 9% and three times the rate of growth in product shipments during the period.
Hybrid parts
Toyota West Virginia has started production of the fifth generation hybrid transaxle. Assembly is a result of a US$300m investment at the plant announced in 2021 and 2022. The latest hybrid transaxle is used for Camry and Corolla Cross models made in the US. Since 2021, Toyota has announced new investment of $18.6bn into its US manufacturing operations to support electrification.
Nissan disaster
Nissan posted quarterly operating profit barely in the black at just 1 billion yen for the quarter ended June 30, 2024. That compares with 128.6 billion yen posted for the same quarter last year. Revenues in the quarter were up 80.7 billion yen to 2,998.5 billion yen, the drop in profitability down to soft prices, model mix and heavy use of incentives in the US market. Nissan lowered its operating profit forecast for this fiscal year to 500 billion yen (previous forecast 600 billion yen).
Stellantis weak
Stellantis has posted a set of disappointing financial results for the first half of the year as its brands struggled with product portfolio gaps, soft prices and swollen inventory. “The company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues,” said Stellantis CEO Carlos Tavares. At €85.0 billion, first half net revenues were down 14% y-o-y, while net profit at €5.6 billion was down 48% on year-ago levels.
Truck batteries
Daimler Truck has opened its Battery Technology Center (BTC) at the firm’s plant in Mannheim, Germany. The facility measures 10,000 square metres, with cells to be produced here on a pilot basis in order to build up process knowledge. Additionally, battery packs will be manufactured as prototypes for test benches and test vehicles. With the pilot line for battery packs, the Mannheim site is preparing for future series production, planned for the second half of the decade as part of the introduction of the next generation of lithium-ion batteries at the plant.
China closing
Honda said this week it planned to close a vehicle assembly plant in China and suspend production at another, to step up its transition to zero emission vehicles. The move is part of a broader review of the company’s global operations with the automaker having already announced earlier this month plans to consolidate vehicle production at one of its two assembly plants in Thailand from 2025 due to overcapacity. Honda has struggled in China with falling demand for internal combustion engine (ICE) vehicles with local new energy vehicle (NEV) manufacturers behind much of the moderate domestic market growth in the last two years.
UK plunge
UK car production fell 7.6% in the first six months of the year, according to figures published by the Society of Motor Manufacturers and Traders (SMMT). UK factories turned out 416,074 units, 34,094 fewer than in the same period in 2023, following a 26.6% decline in June caused by multiple model changes. The SMMT said the performance was expected as manufacturers retool lines to make electrified models following some £23.7 billion of UK investment announced last year.
Have a nice weekend.
Graeme Roberts, Deputy Editor, Just Auto
