Tax breaks, subsidies and other incentives are transforming south east Asia’s second largest economy into a global EV hub. BYD and BMW are two very different auto companies. The former is the Chinese upstart that is tussling with Tesla for the title of world’s leading manufacturer of new energy vehicles, the latter is the venerable 108 year old German company which ranks as the global top selling luxury car brand. Yet despite their dissimilar pedigrees and target markets, BYD and BMW have made one identical business decision: to make Thailand a base to manufacture electric vehicles and the increasingly sophisticated batteries that power them. They are far from alone. Thai government tax breaks, subsidies and other incentives are transforming south east Asia’s second largest economy into a global hub for the production of battery electric vehicles (BEVs) and the hybrid technology which is supporting the zero emission transition.
AR in auto
Go deeper with GlobalData
How is Augmented Reality (AR) tech going to be used in the automotive sector? AR is used in various areas. A notable application is head-up displays (HUDs) and headset infotainment systems, which use AR as part of augmented GPS navigation, warning systems, and to ease poor light conditions. AR headsets are being used in maintenance and manufacturing to reduce training time and perform updates and quality control checks more efficiently and accurately. The advancement of AR in the automotive sector will be key to the metaverse, as it is based on AR-related technology. The metaverse concept (a virtual world where users share experiences and interact in real-time within simulated scenarios) has gained and lost traction since the beginning of 2021. AR-related technologies such as simultaneous localization and mapping (SLAM), facial recognition, and motion tracking will be vital for developing metaverse-based use cases.
Europe disappoints
According to figures released by GlobalData, the Western European PV selling rate disappointed in July at 11.2 million units/year, returning to the levels seen pre-June. PV registrations fell 0.2% YoY to 916k units. Even though YTD sales are up 3.3%, we now expect most of this to unwind over the remainder of the year given the general weakness we have being seeing in selling rates recently. Following an improvement in the selling rate in June, Western Europe returned to the more subdued levels last month. There is a combination of headwinds to market activity that look unlikely to ease significantly anytime soon. Interest rates remain high, even though first moves to loosen monetary policy have now been made by the ECB and the Bank of England. Vehicle pricing is still elevated — despite the supply constraints that caused the sharp uptick in vehicle prices in recent years having faded — and does not show signs of a major downward revision in the near-term. Meanwhile, the BEV market is also losing momentum. We now forecast the full year result to only just eclipse 2023.
India resilience
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By GlobalDataAccording to figures released by GlobalData, the Indian market is showing resilience after an increase in June. In June, the selling rate reached 5 million units/year, a 3% increase from a robust May performance. Light Vehicle (LV) wholesales in June totaled over 387k units, representing a 2% month-on-month (MoM) decline. However, this marks a 2% rise year-on-year (YoY), despite a high comparative figure in 2023. Passenger Vehicle (PV) sales comprised 333k units (-3% MoM, +3% YoY), while Light Commercial Vehicles (LCVs) with gross vehicle weight of up to 6T accounted for more than 54k units (+1% MoM, -4% YoY). The modest reduction in volumes for June resulted from uncertainties surrounding the general elections, as consumers and businesses exercised caution and postponed purchases. Concurrently, automakers curtailed deliveries of underperforming and outdated models to reduce elevated stock levels at dealerships.
US down
July’s lower-than-expected sales solidifies GlobalData’s forecast for US LV sales in 2024 at 16.1 million. According to preliminary estimates, Light Vehicle (LV) sales fell by 0.4% YoY in July, to 1.30 million units. After sales contracted in June due to the CDK cyberattack, it was expected that the market would experience a significant rebound in July, but that failed to materialize to the anticipated extent. US LV sales totaled 1.30 million units in July, according to GlobalData. The annualized selling rate was 16.1 million units/year in July, up from 15.3 million units/year in June. The daily selling rate was estimated at 52,000 units/day in July, up from 50,800 units/day in June.
China rising
GlobalData analysis suggests a lift in underlying demand in China’s vehicle market as scrappage incentive kicked in. n June 2024, the Chinese Light Vehicle (LV) market demonstrated resilience amidst economic uncertainties, achieving commendable month-on-month (MoM) growth. Domestic LV sales, excluding exports, reached 2.1 million units, marking a 7.5% year-on-year (YoY) decrease but a 6.9% MoM increase. The Passenger Vehicle (PV) segment, influenced by a high base from the previous year, saw a YoY decline of 8.0%, yet still accounted for 1.8 million units with a significant MoM increase of 8.1%. Meanwhile, Light Commercial Vehicle (LCV) sales totalled 218k units, with a minor YoY decline of 3.1% and a decrease of 2.1% MoM. For the first half of this year, LV sales amounted to 11.1 million units, a 0.9% YoY increase. Within this, PV sales contributed significantly to the growth, reaching a total volume of 9.9 million units, a 1.1% YoY increase. In contrast, LCV sales, though remaining a substantial part of the market, were slightly down, by 0.6% YoY, at 1.3 million units.
Scandalous Japan
GlobalData expects sales to rebound quickly as supply improves following numerous scandals. The Japanese auto industry has been mired in several scandals this year. It all started in December last year when the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) found some irregularities in Daihatsu’s vehicle certification process. The MLIT ordered Daihatsu to suspend deliveries of all its vehicles (a total of 64 models) until it finished the investigation and re-approved the certification. Daihatsu may not be well known outside of Asia, but it is in the Toyota Group and, along with Suzuki, is the leading Mini Vehicle manufacturer in Japan. Mini Vehicles (i.e., vehicles with engine size 660cc or less) account for almost 40% of total Light Vehicle sales in the country. Therefore, Daihatsu’s production and delivery suspension (for a few weeks to a few months, depending on the model) resulted in a severe shortage of Mini Vehicles.
Finbooting
Finboot says its blockchain-based solution helps to improve supply chain transparency, understand full emissions performance and avoid the higher costs that potentially follow supply chain disruptions. Reducing emissions and improving carbon offset is a priority for many OEMs and companies working within the automotive industry. However, some may be unaware just how much damage their whole supply chain emissions are doing. In some cases, 80% of a company’s overall emissions are due to activities down their supply chain. Finboot, a company specialising in blockchain solution technology is working with companies within the automotive space, helping them to achieve green supply chain management. Finboot offers a traceability solution to automate environmental, social, governance (ESG) standards, sustainability credits record-keeping, create digital product passports, and manage sustainability declarations and certifications. The company has also introduced digital traceability for effective management of production and manufacturing processes. This, it says, helps companies build a resilient supply chain prepared for the growth in demand for low-carbon, renewable and circular products. We spoke to Juan Miguel Perez, CEO, and co-founder, Finboot, to discuss what green supply chain management involves, and what regulations are being put in place to assist.
Autonomous Goodwood
The Indy Autonomous Challenge’s AV-24 race car recently broke Goodwood’s record for the fastest autonomous hillclimb. We found out how this was possible. Autonomous driving has been taken to the next level by the team at The Indy Autonomous Challenge (IAC) who have developed a self-driving AV-24 race car. The race car was quickly turning heads at this year’s Goodwood Festival of Speed, setting the record for the fastest autonomous Hillclimb at the festival, reaching a top speed of 111.2 mph (179 kph) and a finish time of 66.37 seconds. The official vehicle itself is the IAC-built AV-24, that has been retrofitted with hardware and controls to enable automation. The IAC AV-24 chassis is a modified version of the Dallara Indy NXT chassis. Frankie Youd spoke with Marc Ferlet, the director of marketing for the IAC and Rodrigo Senofieni, control engineer with the PoliMOVE-MSU Autonomous Racing team, to learn more about the car and its technology.
Tesla Thai plant off
Tesla has shelved plans to build a vehicle assembly plant in south east Asia, according to reports in Thailand. Prime minister Srettha Thavisin last year announced Tesla was considering building an assembly plant in the country, after he held a series of meetings with the automaker’s top executives in the US and in Thailand. An announcement by Telsa for a US$5bn investment in the country was expected to have been made in the first quarter of this year. Local reports this week suggested the company had decided to focus only on establishing charging networks in the region for now. It currently supplies these markets from its plant in Shanghai, China, which has a production capacity of 1m vehicles per year and accounted for more than half of Tesla’s global output last year.
Thais OK parts JVs
Thailand has approved incentives for joint ventures (JV) between Thai and foreign companies to manufacture automotive parts for vehicles using all types of propulsion systems, its Board of Investment said on Thursday. A Reuters report noted Thailand is Southeast Asia’s biggest autos production centre and an export base for some of the world’s top carmakers. The government is heavily promoting investments in electric vehicles in particular, with incentives to lure major firms.
EVs take half
Half of all vehicles sold in China in July reportedly were either new pure electric vehicles (EV) or plug in hybrids, industry data showed, a milestone that underscores how far the world’s biggest auto market has leapt ahead of western counterparts in EV adoption. Reuters said sales of so called new energy vehicles (NEVs) jumped 37% year on year last month, accounting for a record 50.7% of car sales, citing data from the China Passenger Car Association (CPCA). NEV sales accounted for just 7% of total vehicle sales in China three years ago but its heavy investments in EV supply chains have propelled the growth of the domestic EV industry, leaving many established foreign brands scrambling to catch up.
MG Mexico plans
SAIC’s MG Motor plants to build a manufacturing plant and an R&D centre in Mexico. Zhang Wei, president of MG Motor Mexico, said the operation, alongside producing vehicles, will “also produce market intelligence specifically designed for and by Latin America,” Reuters reported. There was no indication of how much the firm wanted to invest or what the construction timeline was.
Huawai EV
Huawai has launched domestic sales of its first sedan under its newly established Stelato luxury battery electric vehicle (BEV) brand developed with Beijing-based state-owned automaker BAIC Group. The Stelato S9, unveiled at the Beijing International Automotive Exhibition earlier this year, is a luxury battery powered sedan designed to compete with models such as the Mercedes-Benz EQS. It is offered in two variants, Max and Ultra, priced at CNY399,800 (US$55,840) and CNY449,800 (US$62,820) respectively. The Max variant has a range of 816km,while the Ultra goes 721km.
Good Honda Q1
Honda reported a 23% increase in first quarter profit as it benefited from a weaker yen, higher pricing and growing hybrid vehicle sales in the US and its home market. Reuters said quarterly operating profit totalled JPY484.7bn (US$3.3bn) in the April-June period, compared with an average estimate of JPY472.4bn in a poll of seven analysts by LSEG. The company maintained its full year operating profit forecast of JPY1.42trn while slashing its sales outlook for China by 21% to 840,000 vehicles for that period.
Save the date
Politics. Policy. Production. Just three short words, yet these are some of the biggest challenges shaping the automotive industry. The dynamic variables at play make it more challenging than ever to anticipate future trends. To help you keep ahead, we are excited to announce the Global Automotive Outlook Conference in Birmingham, Michigan, on October 24, 2024. At the event, you can join industry experts from GlobalData and discover invaluable insights on key areas such as the economy, vehicle sales, production forecasts, and electrification trends.
Have a nice weekend.
Graeme Roberts, Deputy Editor, Just Auto
