The car does not know the problem

The car does not know the problem

In this first half of 2022, car manufacturers are announcing record financial results. Although new car sales in Europe are down 14% (-12% worldwide), car brands are smiling. And for good reason! All indicators are green.

At Stellantis we recorded first half sales (88 billion euros) up 17% compared to the same period last year. Current operating income increased by 44% with double-digit margins in almost all global markets.

On the part of the Renault group, optimism is also justified. Sales remained stable at approximately 21.1 billion euros (+0.3%), despite sales decreasing by 16%. The operating margin increased by 2.6 points for one year. The manufacturer posted an operating margin of 4.7% excluding Russia, with net income from continuing operations of 657 million euros more than half. This is due to the sale of expensive and well-equipped cars, and discounts. Especially on the profit segment C (Arkana, Austral, Mégane). ” From an operational point of view (apart from the abandonment of operations in Russia which reduce the group’s accounts) this is the best result over the last ten years, it marks a turning point in Renault’s recent history. we describe the side of Boulogne Billancourt.

French manufacturers are not alone. Volkswagen increased its profit by 5.7% in the first half. Same fun in America. Ford announces revenue up 19%.

The car does not know the problem

The end of the semiconductor crisis

Will semiconductor shortages soon become a thing of the past? The situation is improving. Many manufacturers are announcing a return to normalcy by the end of 2023. Thomas Schäfer, President of the Volkswagen brand, wants to be more optimistic and announces ” for the second half of the year (…) an improvement in the distribution situation. »

Aiming for better manufacturing and delivery times. Because if Renault claims that it can deliver the Arkana today in thirty days, the average waiting time for the entire range is more than four months.

Manufacturing of small cars of the semiconductor crisis, estimated at 300,000 units in Renault, and more than 100,000 units in Ford. In any case, everyone is in the starting blocks. Automaker Forvia, born out of a merger between Faurecia and Germany’s Hella, posted on Monday better-than-expected operating results for the first half. And orders are up. Confirmation of the hopes of car manufacturers about the revival of sales.

The car does not know the problem

Full order books

Due to the shortage of semiconductors and partial shutdown of production units, manufacturers cannot meet the demand. At VW, the order book, all engine types combined, equals 728,000 vehicles for Europe alone, including approximately 139,000 ID.s 100% electric. However, in the first half of 2022, the German brand was able to produce only 488,468 vehicles. The group is working to further reduce delivery times for customers and further process the large order book as quickly as possible. Ditto in Renault or Stellantis where orders go well. The increase in rates will only be done gradually. But at the moment it is impossible to give quickly.

The car does not know the problem

Additional cost of raw materials

If the forced march towards electrification and the semi-conductor crisis seem to be on the way to being resolved, the rising cost of raw materials is still a major concern that car manufacturers have to face.

Over a year (January 2021-2022) the price of lithium has increased by 13% since the beginning of 2022. The price of nickel has increased by almost 60% since 2020. During the same period the price of copper has increased by 27. %, that of palladium by 30 % As for football, its rise in the last year has reached 16%. Not to mention the rise in energy prices. The result: the cost of production of an electric car has increased by € 4,500 compared to 2020. This weighs mainly on equipment manufacturers, but also on manufacturers. For Renault, for example, the impact is estimated at 797 million euros. After increasing the selling prices of their cars to improve their margins, manufacturers cannot pass all this inflation. Over the past three years, the price of new cars has increased by 20%. And it seems very difficult to get the customer to bear the full sum of current and future increases. Because if there is a recovery in production levels, the price of raw materials will continue to rise. As a result, some brands are playing it safe for the future.

The car does not know the problem

Reasonable hope

GM Chairman Mary Marra does not hide her fear about the economic situation “for sure” since they have also simulated many situations of decline. “Same story at Volkswagen.” We expect the impact of commodity and energy prices to be greater in the second half of 2022 than in the first half. Says Alexander Seitz, CFO of Volkswagen.

Despite rising commodity and energy prices, builders are adjusting their outlook upwards. ” We are confident that we will be able to more than cope with this price increase and continue our positive trend. We therefore increase our outlook, provided supply conditions continue as expected. For the full year 2022, we are now targeting an operating profit on sales before special items of 4-5% “, assures VW’s finance director. Renault is also revising its financial outlook upwards for 2022. Like almost all manufacturers. We are talking about a car crisis! What crisis?