The car year 2020 will be tough. For the first time, the predicted turmoil in the industry will be felt by everyone. A challenge - and one thing is certain, nothing will remain as it was. Everything is subject to change from now on. Digitization, electrification and what's next in Trollhättan? And what will become of an aging Saab stock and the industry in general? An overview in two parts.
Brussels pulls the reins. The measures aimed at protecting the climate are in a condensed form: Since January, new cars in the EU have had the target of a maximum of 95 grams of CO2 per kilometer. Manufacturers who do not comply can face fines in the billions. A requirement that, as always, comes with exceptions to the rule. 2020 is considered a transition year, with subtleties. Manufacturers are allowed to simply delete the “thirstiest” 2% of their vehicles in the CO5 calculation. In addition, the guideline is watered down with a weight component. Producers of traditionally heavy vehicles are allowed to sell less economical cars on average than those of small cars. In plain language, the new Daimler car fleet may emit 2020 grams of CO102 in 2, but only 92 grams from PSA. There are also credits for special extras such as LED lights. They may be deducted with a maximum of 7 grams.
Electric cars are given a special status. Brussels assumes that they are completely climate neutral, even with a high proportion of coal in the German electricity mix. In the form of a “super credit”, every electric car sold in 2020 is included twice in the calculations, in 2021 with a factor of 1,6. Hybrids also play a part in achieving the climate goals. According to the law, they are assigned a high proportion of purely electric trips. This reduces their consumption to values that have little to do with reality.
The climate protection goals have an impact on car dealerships and consumers. Because they have to see how they deal with it in reality.
Trade and Retail
The trade is under increased pressure. In the past, he wasn't spoiled by high yields. The manufacturers tighten the thumbscrews and swear their sales partners on the climate targets. In 2020, retailers will only generate the possible bonuses for a number of brands if they sell enough low-consumption vehicles. In practice, this will mean 3-cylinder instead of 4-cylinder or hybrid drive instead of combustion engine for the customer. Maybe a new electric car if he has the financial means to do so.
In parallel, we will see a strong thinning out of the variety of models in 2020. Small cars and less popular variants are disappearing, and with it the inexpensive option of a new car. In addition, several importers raised their prices in autumn 2019 in anticipation of the upcoming penalties.
For some brands, the margin system has also been rearranged behind the scenes. Less discount for sales partners, which will increase the economic pressure even more. Against the background of an expected decline in new registrations, there is no optimistic outlook for many companies that are unlikely to survive the faults in the medium term. This is accompanied by digitization and with it new sales channels beyond traditional structures.
Everyone is talking about electrification. Digitization is more important. In the future, it should bring completely new earnings, in addition to the hardware business, which will become less important. The “user experience”, the mobility experience, was shaped by software in the 20s. Assistance systems relieve the driver, semi-autonomous sliding becomes standard. The automobile is developing into a rolling smart home that is constantly streaming and online. The customer should use the time saved for improved productivity - in theory. In practice, the majority will stream or play something online while the car is autonomous.
The German providers are frighteningly naive about this development. For them, digitalization appears to be like selling a Golf C in the 80s. Ashtray and Radio Alpha cost extra, rear window wiper is not. Yes, and floor mats are expensive.
Translated into the present day, this means that you want to sell digitization in the smallest of bits. As if you had to pay extra for each font in a word processor and the option to write on more than one screen page. Until recently, BMW tried very seriously to charge subscription fees for the Apple Car Play connection. Of course failed. Nonetheless, the digital small stuff continues. For 5 digital keys, you are expected to collect € 80,00 per year, and otherwise, too ConnectedDrive Store dominated by annoying little things.
It's terrifying for 2020, that's not how software works. One can only hope for a steep learning curve for German industry. Tesla demonstrates how to do it. In the United States, premium services cost $ 9,90 per month. This means that all services and all updates are integrated in one flat rate. The customer is happy.
The average consumer will be far from happy in the 2020 car year. Higher prices and limited choice, not a good start. In the price-sensitive segment in particular, the customer will feel the effects. The dream of a new car is then postponed or perhaps remains a dream forever. How consumers will react is the billion euro question. You face the great unknown in the game. Are you ready for electric mobility?
Nobody has a valid answer.
To make them feel like it, the subject of electric cars is generously subsidized. In China it failed and the subsidies are reduced to zero. How China is the surprise package of the new year.
Tomorrow, in the next part, it's about a surprising China, old cars and their future. And about Trollhättan.