The auto year 2020 will be tough. For the first time, the forecast upheavals in the industry will be felt by everyone. A challenge - and one thing is certain, nothing will stay as it was. From now on everything is subject to change. Digitization, electrification and what's next in Trollhättan? And what will happen to an aging Saab portfolio and the industry in general? An overview in two parts.
Brussels is tightening the reins. The measures intended to protect the climate in a condensed form: Since January, the target of a maximum of 95 grams of CO2 per kilometer has applied to new cars in the EU. Manufacturers who do not comply can expect fines running into billions. A specification that, as always, comes with exceptions to the rule. 2020 is considered a year of transition, with subtleties. Manufacturers are allowed to simply cross out 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 on average allowed to sell less economical cars than those of small cars. In plain language, Daimler's new vehicle fleet may emit 2020 grams of CO102 in 2, but PSA's only 92 grams. There are also credits for special extras, such as LED light. 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 will be included twice in the calculations, in 2021 then by 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.
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 revenues, in addition to the hardware business, which will lose its importance. The “user experience”, the mobility experience, was shaped by software in the 20s. Assistance systems take the strain off the driver, and semi-autonomous gliding becomes standard. The automobile is developing into a rolling smart home that is permanently streaming and online. The customer should use the time gained to improve productivity - in theory. In practice, the majority will stream something or play online while the car is driving autonomously.
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, this means that one would like to sell digitization in the smallest bites. As if you had to pay extra for every font in a word processor and the possibility of writing on more than one screen page. Until recently, BMW tried in all seriousness to charge subscription fees for the Apple Car Play connection. Failed, of course. Nonetheless, the digital small business goes on. For 5 digital keys you expect to collect € 80,00 per year, and otherwise the 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.
In order to whet their appetite, the topic of electric cars is generously subsidized. In China this failed and the subsidies are reduced to zero. How ever China is the New Year's surprise package.
Tomorrow, in the next part, it's about a surprising China, old cars and their future. And about Trollhättan.