Extract below from an interesting in-depth article recently published in the Telegraph.
Once-mighty carmaker stares into the abyss as China threatens to devour European industry.
"In its 90th year, VW faces an existential threat. For decades, VW has ridden on the coat-tails of a rising China. The Chinese bought Volkswagens, Audis and Porsches in their millions, swelling the company’s profits and seemingly securing the future. Then the music stopped.
Chinese carmakers came of age, and their cheap and sophisticated electric vehicles blew the Germans away – first in China and now, increasingly, everywhere else. In the past three months, VW’s sales in China have collapsed by more than one third from the same period last year.
All the Germans – BMW, Mercedes, VW Group, including Porsche and Audi – they’re all still trying to find a bottom. The worst is still in front of them, from the standpoint of how much further their sales can shrink.
The combustion engine is rapidly ceding ground to electric vehicles (EVs); the ecosystem is heading offshore; Russian gas has evaporated following Vladimir Putin’s invasion of Ukraine; and China’s insatiable appetite is increasingly focused on its own domestic brands.
The Chinese have also reinvented the car as a software-defined “smartphone on wheels”. The cutting-edge EV can be constantly updated remotely and includes as standard such features as screens that automatically sync to your mobile, in-car AI assistants and autonomous driving.
The EVs themselves are also far simpler in design than the older combustion engine models. Building cars is getting simpler because they’re taking the power-train out of it. The Americans and Germans all have huge power-train divisions, tens of thousands of engineers who just work on an engine. That disappears in 20 years, maybe even less than that. That entire division, gone.
German carmaker takes four to five years to get a model from conception to production. Its Chinese rivals take 24 to 30 months, at about one third of the cost. Some now pull off the process in under a year.
There may be another potential saviour for VW’s under-used plants. With Germany spending hundreds of billions of extra euros on defence this decade to meet the threat from Russia, carmakers and their suppliers are eyeing an opportunity to switch to military production..."
https://archive.ph/QYUl3
