AUTOMOTIVE

Still a bumpy road ahead (between weaker volumes, tighter regulations, disruptive innovation and trade uncertainties)

Sector
Value

5800bn USD

M

MEDIUM RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Intensifying consumer appetite for alternative-fueled vehicles and new mobility services
  • Diversity of local needs (i.e. city cars in China, pickups in Thailand)
  • Dynamic demand in emerging markets (growing middle-class, low equipment rate), supporting the mid-term perspectives of the market
  • Demand momentum in premium models and larger Sports Utility Vehicles (SUV), supporting carmakers’ profitability
  • Expertise of established players on differentiation (i.e. design), production and supply-chain issues
  • Slowdown in renewal needs and smaller driving prevalence amongst the younger generation in mature markets’ large cities
  • Value proposition of EVs in the short-term, due to the battery cost, driving range and expansion of the charging network
  • Intensifying environmental requirements (pollution, CO2 emissions) necessitating heavy investments and leading to high(er) car prices
  • New car sales’ dependency on public measures (subsidies, tax exemptions), monetary policies (borrowing cost), oil prices (running costs) and prices in the second-hand market
  • Increasing competition from tech giants and start-ups in the field of connected and autonomous driving technologies

Key players

Country Role Sector risk
United States

#1 Importer

#2 Producer

#3 Exporter

A

Low risk

Germany

#1 Exporter

#2 Importer

#4 Producer

C

Sensitive risk

China

#1 Producer

#3 Exporter

B

Medium risk

Japan

#2 Exporter

#3 Producer

A

Low risk

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Risk Analyst

Marc LIVINEC

marc.livinex@eulerhermes.com

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