A new definition of mobility and alternative forms of propulsion. Digitization and revolution in manufacturing. Everything announced and by no means far away. On the contrary, we are already in the middle of it, and the upheaval is accelerating more and more. Last Friday gave us an example of how fundamental the upheavals will be.
Actually a completely normal, unspectacular day. No big headlines, apart from the tweets of the 45th President of the USA. Other events were drowned out in the din that can damage all world trade. It is worthwhile to listen more closely. Because every single one has the potential for a drama.
Let's start with Wolfsburg. Volkswagen is fully committed to the electric car. On the battery electric. Which could become a problem in the medium term, because the competitors in China are diversifying and promoting other concepts. In addition to battery-electric drives, the fuel cell is accepted, which is ignored on the Mittelland Canal. VW started selling the ID 3 last week. Pre-production of 200 vehicles in Zwickau is already underway, and things really get going after the summer break. 10.000 Vehicles were reserved within 24 hours, and Volkswagen's IT infrastructure reached its limits. Interesting because for the first time the Niedersachsen address their customers directly. And the dealer remains out of the reservations for the first time.
More exciting than the success of the ID 3 is a Friday speculation that concerns VW. You could be different from the traditional brand Bentley disconnect, a relic of the piech era. And instead invest in a new brand, for a young, urban audience. Bentley outside? It would be possible. British luxury brands seem to be moving in heavy seas. There is the unexplained Brexit and the fact that one seems to have no real answers to the current issues of the time.
Jaguar Land Rover to the PSA Group?
Because, also on Friday, there was another speculation. Jaguar-Land Rover is far from its former zenith of success. The diesel scandal plays badly with the company with its heavy off-road vehicles, and in China the sales figures have also fallen due to poor quality. Owner Tata is struggling to survive in India, and so the brand is once again on a possible sales list. The PSA group, which first integrated Opel, could also take over JLR, reported the trade press on Friday. Maybe for a more or less symbolic amount, because the uncertainties of the brands are high.
Bentley, Jaguar, Land Rover. Not enough for a single day. Because, as a Sweden-affine blog, the view always goes to the north. And there a storm is brewing. Not entirely unexpected, because whoever wanted to see the dark clouds could already discover them. Volvo, the flagship investment of the Chinese, is reaching its limits. The sales figures are excellent, but the profit collapsed by 19% in the past fiscal year. A few weeks ago Volvo therefore announced to the 1. May both a hiring stop, as well as a flat-rate reduction the fees of consultancy contracts for 5%.
Volvo pulls the handbrake
Volvo, the job and prosperity engine for Gothenburg is weakening. For the first time in years. Which also has to do with the problems of Volvo's mother Geely, which currently exists in China. In principle, the Geely Group is the only international success story that China has in the automotive world. So far, because even for the spoiled by success group, the sun no longer shines every day. After rapid growth over the years, the sales figures are falling dramatically. Alone in April almost 20% and thus stronger than the overall market.
The Geely Group has to save, and the flat-rate cuts in consultant fees in Gothenburg do not seem to be enough. On Friday, Volvo released the storm and announced the dismissal by some 100 external consultants. Exact figures does not call the company, the assumptions in the Swedish press are speculation.
The party is over
If you just take a closer look, you will discover reports like the one from last Friday in the international press almost every day. The auto industry party is over. International, and the new times will not just come. You are already here and the industry is in a state of tremendous upheaval.
It is under fire from all sides. From an environmental policy standpoint it is difficult, innovative startups question the status of the established. China is pushing into the mobility business with power and a lot of money, and the vehicles of the next day are nothing more than networked end devices - which just happen to have 4 wheels.
Those who have lean structures, the best software engineers and are capable of rapid adaptation will survive. The industry is becoming more uncomfortable, but also more exciting. It remains to be seen whether the fabulous earnings from the major car manufacturers will finally be a thing of the past. But probably.
Pre-production in Trollhättan
From Gothenburg and Volvo further north. To Trollhattan. The city, like no other, anticipated the transformation of the auto industry. The bankruptcy of GM left visible traces until today and ended in the end of Saab. What followed was the creation of smaller, innovative companies with state help. Trollhättan remained in business despite all the bad predictions.
Maybe because the industrial city has a talent for reinventing itself. Steam engines, turbines, diesel locomotives and airplanes. Everything was there once, big and important. And nothing lasted. A lot is happening in this city, and a new era is dawning not only in Zwickau.
As it seems, the slumber of the former Saab plant can come to an end this year. After almost 8 years, one does not include the short-term production for the model year 2014. The pre-production of at least one OEM product will enliven 2019 the factory, from 2020 should then run two product lines from the tapes. And if things go well in this unpredictable change, then at the latest 2021 could already be three brands whose vehicles are produced in the former Saab factory.