Legacy automakers are standing at a crossroads between defending in opposition to profitability strain for short-term survival and persevering with future investments for long-term progress, an analyst from Hyundai Motor Group stated on Jan. 16.
Yang Jin-su, director of mobility trade analysis at Hyundai Motor Group HMG Administration Analysis Institute, offered the evaluation on the Korea Automotive Journalists Affiliation seminar held on the Korea Automotive Corridor in Seocho-gu, Seoul.
This 12 months’s international market low-growth development is changing into entrenched, and with the rising burden of creating next-generation mobility, corporations could face administration dilemmas, Yang stated.
Automakers skilled important decreases in working income final 12 months as a consequence of U.S. tariff impositions and the rise of Chinese language manufacturers like BYD. Toyota, the world’s primary automaker, estimates that working revenue discount as a consequence of tariffs from final March to this March will attain roughly 1.4 trillion yen. This represents an expanded loss in comparison with the earlier forecast of 1.2 trillion yen. Volkswagen additionally expects final 12 months’s working revenue margin forecast to be 4-5%, lowered by 1.5 share factors from the present normal.
China’s progress momentum can also be threatening. At the moment, gross sales quantity and market share are each increasing in most areas they’ve entered, together with Western Europe in addition to Thailand, Indonesia, Malaysia, and Brazil. Yang defined, “If China has expanded its affect by export-oriented approaches to date, it would face a brand new part once more beginning this 12 months based mostly on native manufacturing.” One instance is BYD, which is increasing native manufacturing beginning with Turkey this 12 months. As Chinese language manufacturers are selling worth competitiveness, the extra intense the competitors turns into, the extra current automakers are inevitably underneath strain on profitability.
Automakers additionally face a world trade demand slowdown. Yang projected that this 12 months’s international automotive trade demand can be 87.93 million models, a rise of solely 0.2% from final 12 months. By main area, the projections are: China 24.47 million models (0.5%↑), United States 15.93 million models (2.3%↓), Western Europe 15.14 million models (1.5%↑), India 4.82 million models (5.6%↑), ASEAN 3.19 million models (3.8%↑), and home 1.64 million models (0.6%↓). The U.S. market is predicted to shrink to the 15 million unit stage for the primary time in three years as a consequence of rising car costs and insurance coverage prices from merchandise tariff impositions, whereas China is projected to point out a flat development as a consequence of weakened shopper sentiment and diminished new power car (NEV) advantages. The home market is predicted to lower barely year-over-year as a consequence of family debt gathered from extended excessive rates of interest and excessive inflation, and the export-first methods of the home mid-tier three corporations.
Competitors for future applied sciences is intensifying additional. Yang defined, “Sensible automobile applied sciences that had been initially utilized solely to premium electrical autos are anticipated to broaden to inner combustion engines and hybrid autos.” He continued, “Software program competitiveness has grow to be a key variable figuring out car worth, and we will see that we’ve got entered a brand new aggressive part the place the velocity of SW know-how response determines market survival.”
The robotaxi market can also be changing into lively. Waymo, Google’s autonomous driving subsidiary, and Tesla are steadily increasing their robotaxi service areas inside the USA, whereas Amazon’s Zoox continues aggressive funding, leveraging huge capital energy. Hyundai Motor Group additionally plans to commercialize robotaxi in the USA by the top of this 12 months.
