Latest news with #AndrewBergbaum
Yahoo
6 hours ago
- Automotive
- Yahoo
Britain's carmakers ‘the most vulnerable in Europe'
Britain's 'precarious' car industry is at greater risk than any other in Europe as the global market is reshaped by competition between the US and China, a new report warns. In an outlook for 2025, researchers at consultancy AlixPartners said they expected car sales to grow by just 1pc around the world with growth in China and Asia offsetting sluggish demand in the West. This, along with the impact of US tariffs, is expected to force car companies to slash costs and production as they also divert cash towards the development of electric models. But the researchers warned that within this tough environment, Britain was 'potentially the most disadvantaged market of all' because of its high energy costs, 'fragmented' supply chains, skills shortages and 'political and economic uncertainty'. Andrew Bergbaum, of AlixPartners, said the majority of cars made in Britain were also exported – leaving the domestic industry exposed as manufacturers look to cut back output. He said: 'The polarisation of the car market between the US and China is going to hit Europe very hard – the Europeans are stuck between two big players. 'And unfortunately, the UK is a highly disadvantaged market in a highly disadvantaged region.' Britain's energy prices, for example, would remain high even after recently-announced support from the Government, he added. The AlixPartners report sets out a grim forecast for European car manufacturers as competition in the electric car market intensifies. With growth in sales of the car market overall slowing, companies will be forced to cut costs to maintain investment in the shift to new electrified models. Even in China, growth this year is only expected to reach 3pc, with Chinese manufacturers such as BYD and Chery – which face prohibitive tariffs in the US – planning to boost sales by expanding further into Europe. They are aiming to sell an extra 800,000 cars in Europe over the next five years, AlixPartners said, taking their market share to 10pc. By contrast, European brands are expected to cut production over the same period by 400,000 vehicles and are earmarking assets and plants for sale. With the global market fragmenting, Mr Bergbaum said there was a risk that it became increasingly difficult for car companies to develop base platforms they could use to sell cars all over the world – forcing them to invest more in developing region-specific versions. The UK was badly positioned for this because of how dependent its factories are on exports. Of 905,233 vehicles manufactured domestically last year, around eight in 10 were shipped abroad. At the same time, carmakers say domestic demand for cars is sluggish. The market returned to growth in May but sales only rose by 1.6pc compared to a year earlier. On Tuesday, Jonathan Reynolds, the Business Secretary, vowed that the Government would seek to lay 'the foundations for the sector to succeed in the future' with its new Industrial Strategy. 'This is a Government that is right behind you as you pursue what I believe is one of the greatest technological opportunities of our time,' he said, referring to the transition to electric vehicles. 'Our collective job is to bring more investment, more product lines and more jobs here.' A separate Society of Motor Manufacturers and Traders (SMMT) report on Tuesday called for measures to make the UK one of the world's top 15 destinations for automotive manufacturing again. The lobby group has been calling for consumer incentives to boost uptake of electric vehicles, which remain more expensive than conventional internal combustion engine cars. It said manufacturers had spent £6.5bn on discounting to boost sales over the past 18 months – more than £300m a month – but that this was 'unsustainable'. Instead, the SMMT wants the Government to slash VAT on electric car sales or provide grants. It also wants taxes on electric car charging and vehicle excise duty to be cut. Mike Hawes, chief executive of the SMMT, insisted 'confidence is returning'. But speaking at the group's annual conference in London on Tuesday, he added: 'That confidence is quite fragile. 'We think with decisive action we can renew that confidence, but we need to cut those costs that our rivals do not face.' He pointed to energy costs as an example of the UK's disadvantages. A deal to protect British carmakers from Donald Trump's tariffs on imports to the US comes into force on Monday. Sir Keir Starmer inked the automotive section of his trade deal with President Trump at a recent G7 meeting, with full details still to be published. It was previously unclear when it would take effect, reducing tariffs on British cars from 27.5pc to 10pc. But Mr Hawes said it would come into force next week with an agreed tariff-free quota of 100,000 cars. How that will work in practice is still to be confirmed, with the question of how the limit will be split between companies such as Jaguar Land Rover, Aston Martin and Bentley a matter for the Government, he said. Speaking to reporters, Mr Hawes added that the car industry hoped the 100,000 figure would rise over time and was a 'floor, rather than a ceiling'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
9 hours ago
- Automotive
- Telegraph
Britain's carmakers ‘the most vulnerable in Europe'
Britain's 'precarious' car industry is at greater risk than any other in Europe as the global market is reshaped by competition between the US and China, a new report warns. In an outlook for 2025, researchers at consultancy AlixPartners said they expected car sales to grow by just 1pc around the world with growth in China and Asia offsetting sluggish demand in the West. This, along with the impact of US tariffs, is expected to force car companies to slash costs and production as they also divert cash towards the development of electric models. But the researchers warned that within this tough environment, Britain was 'potentially the most disadvantaged market of all' because of its high energy costs, 'fragmented' supply chains, skills shortages and 'political and economic uncertainty'. Andrew Bergbaum, of AlixPartners, said the majority of cars made in Britain were also exported – leaving the domestic industry exposed as manufacturers look to cut back output. He said: 'The polarisation of the car market between the US and China is going to hit Europe very hard – the Europeans are stuck between two big players. 'And unfortunately, the UK is a highly disadvantaged market in a highly disadvantaged region.' Britain's energy prices, for example, would remain high even after recently-announced support from the Government, he added.
Yahoo
9 hours ago
- Automotive
- Yahoo
Britain's carmakers ‘the most vulnerable in Europe'
Britain's 'precarious' car industry is at greater risk than any other in Europe as the global market is reshaped by competition between the US and China, a new report warns. In an outlook for 2025, researchers at consultancy AlixPartners said they expected car sales to grow by just 1pc around the world with growth in China and Asia offsetting sluggish demand in the West. This, along with the impact of US tariffs, is expected to force car companies to slash costs and production as they also divert cash towards the development of electric models. But the researchers warned that within this tough environment, Britain was 'potentially the most disadvantaged market of all' because of its high energy costs, 'fragmented' supply chains, skills shortages and 'political and economic uncertainty'. Andrew Bergbaum, of AlixPartners, said the majority of cars made in Britain were also exported – leaving the domestic industry exposed as manufacturers look to cut back output. He said: 'The polarisation of the car market between the US and China is going to hit Europe very hard – the Europeans are stuck between two big players. 'And unfortunately, the UK is a highly disadvantaged market in a highly disadvantaged region.' Britain's energy prices, for example, would remain high even after recently-announced support from the Government, he added. The AlixPartners report sets out a grim forecast for European car manufacturers as competition in the electric car market intensifies. With growth in sales of the car market overall slowing, companies will be forced to cut costs to maintain investment in the shift to new electrified models. Even in China, growth this year is only expected to reach 3pc, with Chinese manufacturers such as BYD and Chery – which face prohibitive tariffs in the US – planning to boost sales by expanding further into Europe. They are aiming to sell an extra 800,000 cars in Europe over the next five years, AlixPartners said, taking their market share to 10pc. By contrast, European brands are expected to cut production over the same period by 400,000 vehicles and are earmarking assets and plants for sale. With the global market fragmenting, Mr Bergbaum said there was a risk that it became increasingly difficult for car companies to develop base platforms they could use to sell cars all over the world – forcing them to invest more in developing region-specific versions. The UK was badly positioned for this because of how dependent its factories are on exports. Of 905,233 vehicles manufactured domestically last year, around eight in 10 were shipped abroad. At the same time, carmakers say domestic demand for cars is sluggish. The market returned to growth in May but sales only rose by 1.6pc compared to a year earlier. On Tuesday, Jonathan Reynolds, the Business Secretary, vowed that the Government would seek to lay 'the foundations for the sector to succeed in the future' with its new Industrial Strategy. 'This is a Government that is right behind you as you pursue what I believe is one of the greatest technological opportunities of our time,' he said, referring to the transition to electric vehicles. 'Our collective job is to bring more investment, more product lines and more jobs here.' A separate Society of Motor Manufacturers and Traders (SMMT) report on Tuesday called for measures to make the UK one of the world's top 15 destinations for automotive manufacturing again. The lobby group has been calling for consumer incentives to boost uptake of electric vehicles, which remain more expensive than conventional internal combustion engine cars. It said manufacturers had spent £6.5bn on discounting to boost sales over the past 18 months – more than £300m a month – but that this was 'unsustainable'. Instead, the SMMT wants the Government to slash VAT on electric car sales or provide grants. It also wants taxes on electric car charging and vehicle excise duty to be cut. Mike Hawes, chief executive of the SMMT, insisted 'confidence is returning'. But speaking at the group's annual conference in London on Tuesday, he added: 'That confidence is quite fragile. 'We think with decisive action we can renew that confidence, but we need to cut those costs that our rivals do not face.' He pointed to energy costs as an example of the UK's disadvantages. A deal to protect British carmakers from Donald Trump's tariffs on imports to the US comes into force on Monday. Sir Keir Starmer inked the automotive section of his trade deal with President Trump at a recent G7 meeting, with full details still to be published. It was previously unclear when it would take effect, reducing tariffs on British cars from 27.5pc to 10pc. But Mr Hawes said it would come into force next week with an agreed tariff-free quota of 100,000 cars. How that will work in practice is still to be confirmed, with the question of how the limit will be split between companies such as Jaguar Land Rover, Aston Martin and Bentley a matter for the Government, he said. Speaking to reporters, Mr Hawes added that the car industry hoped the 100,000 figure would rise over time and was a 'floor, rather than a ceiling'. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
South China Morning Post
24-04-2025
- Automotive
- South China Morning Post
Chinese EV makers boost exports to Russia, Middle East to counter US, Europe tariffs: report
China's car shipments are projected to cool this year due to geopolitical tensions following two years of rapid growth, while US tariffs will saddle the nation's auto industry with an additional US$46 billion in export costs, according to management consultancy AlixPartners. Advertisement Auto exports would climb by about 4 per cent to 6.7 million units in 2025, the firm said in a report on Thursday. Shipments grew 23 per cent last year to 6.4 million units after producers boosted sales to Russia and Belarus by 28 per cent, and to the Middle East by 61 per cent, to mitigate export curbs in North America and Europe, it said. 'China's car sales to Russia and Belarus have more than doubled over the past five years, insulating it in part from the volatility of tariffs,' said Andrew Bergbaum, global leader of the automotive and industrial practice. 'Many countries have increased tariffs on Chinese automobiles since 2024, with the US representing the highest tariff of [up to] 245 per cent,' AlixPartners said. Chinese EV makers also face a 100 per cent tariff in Canada, 35 per cent in Brazil and 17.8 per cent to 45.3 per cent in Europe. 03:30 Global carmakers cede world's largest auto show to Chinese EVs Global carmakers cede world's largest auto show to Chinese EVs Tariffs would increase the cost of China's automotive exports to the US by US$46 billion, the report said, with car producers taking a US$7.2 billion hit on shipments, and auto-parts suppliers shouldering US$38.8 billion. Advertisement
Axios
22-04-2025
- Automotive
- Axios
Tariff impact on Chinese automakers is muted, report says
Chinese automakers are turning to Russia and the Middle East to offset the impact of global tariffs imposed by the U.S., Europe and other countries. Why it matters: Despite the global tariff storm, China remains an industry juggernaut, dominating vehicle sales in its home market while continuing to expand exports around the world. Driving the news: Automotive executives from around the world are convening this week at the Shanghai auto show, in part to gauge their competitiveness against their fast-moving Chinese rivals. New research from AlixPartners, the global consulting firm, shows just how strong China's auto industry has become. By the numbers: China's exports soared 23% in 2024, to 6.4 million passenger vehicles, more than 50% above second-ranked Japan. Russia and the Middle East together accounted for 35% of China's vehicle exports in 2024, surpassing combined shipments to Europe and North America for the first time. AlixPartners forecasts Chinese brands will account for 30% of the global automobile market by 2030, compared with 21% last year. "China's car sales to Russia and Belarus have more than doubled over the past five years, insulating it in part from the volatility of tariffs," said Andrew Bergbaum, global leader of the Automotive and Industrial Practice at AlixPartners, in a press release. Yes, but: That doesn't mean China's auto industry is unaffected by the trade war. Tariffs imposed by the U.S. and others would increase the cost of China's exported vehicles and auto components by about 24%, or $46 billion, estimates AlixPartners, based on 2024 export data. That represents just a tiny fraction of China's total automotive output, however, the report noted. Nearly $45 billion of that extra cost is attributed to U.S. tariffs, but who ultimately absorbs it — automakers, suppliers or consumers — remains to be seen. Still, as tariffs ripple through the market, China's export growth is expected to moderate to 4% in 2025, AlixPartners projects. Growth in China's domestic market, meanwhile, is expected to continue in 2025, with sales up 4%, to 26.8 million vehicles, driven by sales of electric and hybrid vehicles, along with demand for assisted-driving technology.
