The DECLINE of the AUTOMOBILE Industry? – VisualPolitik EN

The DECLINE of the AUTOMOBILE Industry? – VisualPolitik EN


For more than 100 years the automotive sector
has been one of the most important industries
in the world. For decades it has meant strength,
wealth and industrial power.
Companies like General Motors, Volkswagen
or Toyota were largely responsible for spreading
the tentacles of the great industrial powers
around the world.
Folks, we are talking about amazing numbers:
Every year, nearly 100 million vehicles are
sold worldwide;
This industry employs tens of millions of
workers.
This is just in the United States and Europe,
and to more than 20 million people.
And every year, these companies invest about
100 billion dollars in R&D.
It may be hard to believe, but companies like
Volkswagen, Daimler or Toyota invest in Research
and Development almost as much as some of
the best-known companies in Silicon Valley.
Check this out.
In fact, with more than 15 billion dollars,
the German group Volkswagen is none other
than the third company in the world that allocates
the most resources each year to investment
and development. It stands just behind Amazon
and Alphabet.
However, folks, just a second, because the
automotive industry isn’t going through
its best moments… At least where popularity
is concerned.
In the last 2 years many questions have arisen,
so many that, recently, it has led to the
main question: Are we seeing the decline of
the automobile industry as we know it today?
Could this sector’s good years be over?
But… Now, do you want to know exactly what
we’re talking about?
Listen up.
(GIANTS WITH MUD FEET?)
Lately, car manufacturers are criticized constantly.
There’s constant talk of the electric car,
the autonomous car, car sharing, trend changes,
changes in habits among the youngest or, simply,
a world of megacities where cars would supposedly
become obsolete – At least private cars.
All this is fueling the Peak Car concept,
according to which the automotive industry
would be on the verge of reaching its historical
sales maximum, if it hasn’t already reached
it.
This means that from now on, or at least shortly,
we’d see fewer cars being sold each year.
Not more cars, fewer cars.
“When you put all these trends together,
you’re going to see a cap on personal vehicle
ownership start to emerge. “We are near
peak car.” Mike Ramsey, an automotive consultant
with researcher Gartner Inc.)
As if this weren’t enough, governments and
the growing social conscience are exerting
increasing pressure so that manufacturers
produce more environmentally-respectful cars.
And this is all very good, but it presents
a slight inconvenience for producers:
Developing an entire technology and adapting
all processes to it costs a fortune.
Volkswagen said it will spend 44 billion euros
on electric cars, digitalization, autonomous
driving and new mobility services by 2023.
REUTERS)
German automakers will spend $45 billion on
electric vehicles over the next three years.
Business Insider)
But, we could of course think… Sure, so
what? In the end they’ll still be rich from
car sales.
And that’s precisely where the Peak Car
concept comes into play.
Allow me to explain: if costs grow as a result
of the new technologies that cars have to
incorporate and of all the investments that
companies have to make – for example in
R & D or to adapt their production methods
– and then, sales drop…
Well… it would soon lead to the collapse
of these companies’ margin or profit. Higher
costs and lower income.
Not to mention the risk that some will fail
in the transition and get kicked out of the
market.
In other words, we could say, folks, that
car manufacturers are facing a kind of perfect
storm.
A reflection of what all these concerns involve
can be found in the automobile companies’
stocks; that is, in the price of their shares.
In general, these companies are quoted at
a price/earnings per share ratio that is much
lower than the market average.
Of course, given the circumstances many professional
investors won’t hesitate to consider them
as value traps:
They look like cheap stocks, yes, but as their
margins and profits are going to drop, well…
They really aren’t.
Now, at this point, before continuing, there’s
a question we need to ask ourselves… Why
or how was the Peak Car concept reached?
Listen up.
(AN INDUSTRY IN DECLINE?)
Friends, the Peak Car concept rose from an
idea:
technological changes, trends and the world’s
increasing urbanization are going to lead
to fewer care sales.
See, one the one hand, our planet is increasingly
becoming a world of cities, especially megacities.
The percentage of the world population that
lives in cities won’t stop growing. In 2050,
70% of the entire world population is expected
to live in urban areas
And, logically, in these spaces, a car can
sometimes be more of a nuisance than a solution.
Traffic, pollution… Many large cities have
begun to restrict the use of vehicles in urban
centers.
For example, in Shanghai, Shenzhen or Beijing,
license plates for cars with combustion engines
are auctioned. That is, there is an annual
limit of new enrollments and if you want to
get one you have to really dig into your pocket…
If you can or it’s worth it.
Then, this process is reinforced even more
due to the growing environmental concerns
that exist in society, that have led to new
car sharing formulas and an extension of services
such as UBER or LYFT.
That way, following the reasoning of the Peak
Car defenders, if the average time of use
of the vehicles grows, fewer vehicles will
be needed, and if hiring a car can be comfortably
done at any time with your mobile phone, well…
you won’t be as encouraged to buy one.
Why spend money on a car that will spend most
of its time in a garage?
And let’s not even talk about when autonomous
cars arrive.
The result? Among other things, there will
be fewer cars sales.
And not only that.
Meanwhile, as the costs for motor companies
increase, and predictably so does the competition
as new Chinese brands and who knows if companies
like Google or Microsoft delve fully into
the business… the prospects for the industry’s
giants aren’t precisely good.
Folks, these are the reasons why the big car
companies aren’t in style (in the stock
market).
However, lets pause for a moment before condemning
the entire industry to hell.
Let’s ask ourselves a question, what if things
weren’t so bad?
Can we find signs to think that the golden
years of the powerful automobile industry
haven’t ended yet?
Well, folks, we can.
Listen up.
(WHAT IS TO COME)
China moved from the bicycle to the car in
just 20 years. Until 1994 the typical images
of the country included streets crowded with
bicycles.
To give you an idea, in 1985 there were fewer
cars throughout China than in London city.
And to top it all, almost all those cars were
from the government. Less than 3% of the country’s
passenger cars were privately owned.
However, from 1994 everything changed. In
just 15 years, China surpassed even the United
States as the world’s largest automobile market.
Do you know how many cars are currently sold
in China each year? No less than 28 million
cars, 11 million more than in the United States.
To give you an idea of ​​what this entails,
General Motors itself, one of the great icons
of the American industry, today sells more
cars in China than in the United States.
The evolution, folks, was spectacular and
there was a reason: the enormous growth of
the Chinese middle class, of which we already
talked about here in VisualPolitik.
However, despite all this growth, the rate
of cars in China is still very low. It’s
5 times smaller than in the United States.
In other words, there’s still a lot of room
to grow.
But okay, you may be thinking, but Simon…
Now, with the changes we’ve seen, the Chinese
won’t need as many cars.
And, also, in many of its cities they’re
just annoying.
Well yes… and no.
We tend to forget it but the Chinese middle
class and the families’ purchasing power
continues to grow strongly…. And even though
the percentage may be somewhat lower than
in the past, families still want to have their
own car.
And if they have money, then they could get
an AUDI, a BMW, a Mercedes… something typical.
Folks, it’d be a good idea to take a look
at Japan’s experience.
See, Japan has one of the largest urban populations
on the planet.
94% of Japanese live in urban areas and the
country also has the world’s most populated
city, Tokyo, with 38 million people living
in its metropolitan area.
Well, despite this, the aging population and
having public transport systems that range
among the best in the world, the rate of vehicles
per capita is not only 4 times higher than
in China but new cars sales remain stable.
In other words, if we talk about probabilities,
I think we can expect the Chinese market to
continue to rise for quite some time.
But, the good news doesn’t end here folks.
In the United States, sales are at record
levels, even if vehicles’ average age has
risen to a stunning and record-breaking number
of 12 years.
That is, if we consider that the US economy
has full employment, wages are growing and
the way of life hasn’t changed – the cities
haven’t changed – it doesn’t seem probable
that sales will fall permanently. Don’t
you think?
Because together, China and the United States,
with nearly 50 million cars sold each year,
account for more than 50% of world sales.
“Right now, everyone still hopes to sell
more cars. I haven’t come across a single
company that forecasts a decline,” Philipp
Kampshoff, a McKinsey partner who specializes
in transportation.)
But that’s not all. The big manufacturers
could still receive some great news: INDIA.
A country with more than 1.3 billion inhabitants,
that even though had lagged behind China,
is now beginning to wake up…
The Indian government is building more than
20,000 km of new roads in a country where
the vehicle rate is very low.
Little by little, that is beginning to change.
In 2018 vehicle sales in India grew by almost
9% to 3,270,000 vehicles, overtaking the United
Kingdom as the fifth largest market in the
world.
By the way, the company that sells the most
cars in India is Japanese. Suzuki controls
almost 50% of the Indian market.
However, folks, that’s nothing.
Just to reach China’s vehicles rate, India
would have to sell more than 100 million cars.
And the strange thing wouldn’t be to think
that it will happen, but that it won’t.
Due to status, freedom or comfort, families,
when they can afford it, want to have their
own car.
Just 20 years ago, we would’ve never thought
that China would sell more than 28 million
cars a year.
Of course, behind India there are also Vietnam,
Indonesia and many African countries.
So, saying that fewer cars will be sold…
at least I think it’s fair to say that it
isn’t that clear that it will happen.
And regarding carpooling services, at the
moment the data tells us that what they do
is increase the number of kilometers traveled,
not decrease them.
That is, they make people use cars more as
a means of transport. Yes, UBER’s cars,
or those from different Car Sharing platforms,
move for more time, yes, but they also cover
more kilometers, so their average life is
lower than that of private vehicles.
In addition, car companies themselves have
delved strongly into the car sharing-market
in cities. They see a potentially huge business,
a new source of income.
Daimler and BMW Plan $1.1 Billion Uber Battle.
Daimler and BMW are pouring more than 1 billion
euros into their joint car-sharing and ride-hailing
businesses to take on the likes of Uber Technologies
Inc. and Lyft Inc.The German venture is estimated
to become the world’s largest car-sharing
operator. Bloomber)
But okay, at this point, you may have some
concerns, but Simon, what will happen to the
environment? Is all this sustainable?
Well, sorry, but the question shouldn’t
be whether it’s sustainable or not, but
how we’re going to achieve sustainability:
either with more efficient engines, the hydrogen
engine or with the electric car.
For example, along this line, in just 5 or
6 years the Chinese government wants more
than 6 million electric cars to be sold in
the country each year. Cars that, by the way,
aren’t subject to limitations in large cities.
That explains news like this:
“Tesla Plant Key to Musk’s Future Ambitions
Takes Shape in China. Three months after groundbreaking,
Tesla Inc. is rushing to complete
its multibillion-dollar factory on the outskirts
of Shanghai to capitalize on growing demand
in the world’s largest electric-car market”.
Bloomberg)
Anyway, folks, now you see. The automobile
market will change a lot in the coming years,
but… Thinking that car sales will fall year
after year?
Only time will tell, but beyond conjunctural,
short-term situations, it isn’t clear whether
the automotive industry’s best times are
behind them.
So I really hope you enjoyed this video, please
hit like if you did, and don’t forget to
subscribe for brand new videos. Don’t forget
to check out our friends at the Reconsider
Media Podcast – they provided the vocals in
this episode that were not mine. Also, this
channel is possible because of Patreon, and
our patrons on that platform. Please consider
joining them and supporting our mission of
providing independent political coverage.
And as always, I’ll see you in the next
video.

100 Replies to “The DECLINE of the AUTOMOBILE Industry? – VisualPolitik EN”

  1. Sign up for Skillshare today: https://skl.sh/visualpolitik and get a 2-month free trial, big thanks to Skillshare for sponsoring this video!

  2. And the insurance companies who charge private owners ridiculous high premiums can now say bye bye to our clientele

  3. Too much technology and waaaay to expensive for something that was designed to just take from point A to point B ….i will never buy a new car …insurance registration ..one little fender bender and they treat you like if you were Adolf Hitler … Isurance u pay for years and one little insident were no one got hurt and they raise the shitt out of your payment

  4. That's why Honda is still the biggest private engine builder in the world!!! No cheating but years ahead of anybody!!

  5. They deserve to go under. They have all gotten greedy and charging ungodly prices for cheaper junk. A modern car is nothing more than a fancy iphone on wheels.

  6. I think major reason is car sales spiked in last 4 years due to uber and ola(India) and now there are way more cab…like they hit a pleateu

  7. The real problem with the auto industry is, they charge more than 40k for a Camaro, and a Mustang, and sell trucks with a base price over 50k. Most of them dont last 2 years without major component breakage. They are fully capable of building and selling family sized cars (5+ passengers) for 25k or less that still pass all standards and 10 year lifespan. Only greed makes people pay more than that. Such a plastic waste

  8. Maybe car ownership will peak in affluent nations, but used vehicles will find favor in developing nations. People will simply learn auto mechanics to repair their own cars and trucks.

  9. I really like Ford f150 but will not buy one I use a truck for work and because the bed of the truck is so high off the ground,and the price is just crazy expensive I will just get a new crate engine and have it installed and keep my 2002 f150 running for years

  10. A 100k benz looses %90 of its value over 10 yrs. surest fastest was to distroy capitol. atleast you have a chance in vegas

  11. As I type my comment, in India car and other types of vehicles sales have been drop by more than 10 percent. Actually Indian economy is in tailspin, no one is willing to spend.

  12. No mention on how the China-US trade war is affecting the automobile industry? Or US' tariffs on countries all over the world, especially Europe?

  13. It's simple the Chinese and Indians and not whiny white liberals from the west
    Meaning their market will grow or stabilise and not shrink

  14. I like the content but with all the comercials youtube sends plus yours makes for hard viewing. 4 non skips in 7 minutes plus yours at the beginning. Damn.

  15. @VisualPolitik EN I dont understand why? Global Warming is peaking, and car sale also peaking. There must be connection of some sort…

  16. Even today, even here the Los Angeles area going car free is easy. Uber and Lyft, rental cars and I can borrow from friends as I help them with their tech problems, but mostly bicycle that can be the fastest during rush hour.

  17. People are putting off upgrading from their ICE car to another ICE but waiting/saving for an EV car. My gf is, I am and our parents are doing the exact same thing

  18. People are getting tired of the noise pollution and rats and crime of the big mega city's and I know many people that are moving to the country and I think it's a bigger trend then people know as people get older the big city's are not attractive to those people and we are a nation that is definitely getting older and that trend is not going to stop it's going to actually speed up.

  19. Good thing I'm not on the market a new ride. I'm waiting for a full-fledged electric it'll be a while and thats just fine with me.

  20. great topic but honestly, the way the video is built misses the point through the illustration. the use of proper images to illustrate the content would make it more appealing. But great work though.

  21. One thing is for sure the future. The number of different brands and models HAS TO DECLINE considerably. Autonomous transport from A to B in the cheapest affordable way will be key objective. McKinsey is WRONG or watching only a couple of years ahead.

  22. sales are falling but in my city more vehicles are registered everyday than number of babies are born

    in city of 3 million there are 3.8 million registered vehicles

    no one knows why this happened

  23. Companies like Ford for example must chew off their own leg in order to go electric. Considering their size and massive debt load making that transition will be extremely painful. Building an electric car is very different than your standard ICE car. The first question being where will you get the batteries? To answer this take 3-5 years.

  24. Love this channel BUT having ads every 3-5 minutes (it seems 30 seconds) is really off putting. I know you have to have them BUT I refuse to watch tv because of adverts. The next advert I will switch over to something else.

  25. With prices so high on cars and trucks the decline in sales will come. What happened to the affordable cars and trucks. The life expectancy of truck is no longer now than it it was in the mid 90s. Plus we have more problems. All that nice to have crap cost to much. The electronic crap has to manu sensors to keep operating. The dealers are so overpriced and unethical with the business no one wants to do business eith the dealers. When manufacturers figure out if it isn't broke don't fix it.

  26. China's car growth is because of the newly developed middle class, prior to 1984 no one could afford them, as industry grew so did their middle class and more chinese middle class can afford cars, opposed to the United States which has seen a HUGE decline in the middle class, the fact is less cars are being sold in the USA because vehicle costs have risen above income levels, you have a tons of industries all fighting for your money mortgage industry, healthcare, colleges, auto insurance when everyone is squeezing the last dollar out of you, the middle class has to make choices. If a vehicle is maintained it can easily run 10-25 years. It financially doesn't make sense to purchase a new car every 3-6 years, new cars are more of a "Status Symbol" then a life necessity.

  27. Why do so many people argue the existence of uber or lyft by changes in environmental concerns? That has nothing to do with it!

    If – at all changed – the amount of paid driving has increased by uber and lyft and less people drove home drunk at night!

  28. AS the GDP and Federal budget has increased my net has NOT increase in proportion. I bet I am not alone. That and I am not in the market for a sexy mom car or a gigantus pickup. Also why does everything have to be automatic, electric or touch? Maybe I should just give in and find a phone app that will drive for me.

  29. Confusion! yes , i'm confused. I couldn't connect the dots…. After ten minutes, my mind was was asking itself "whats the point this chap is trying to make, that relates fewer cars to (what?) and when?
    I have given this video the thumbs down.

  30. Currently the Automobile industry is facing recession in India even though

    1.India is miles behind Western and Chinese markets in electric car adoption
    2. India has world’s biggest share of population living in rural areas which don’t have access to ride hailing services like uber
    3. Indian public transportation is also not that efficient considering it’s a country of more then 1 billion population and Metro is only available in tier1/ metro cities

  31. The defunative reason for the decline is simple. Automobiles cost almost as much as a house in many cases. You can no longer get a plain jane car for 10k cheapest ive been able to find has been around 30k. Most people dont even bring that much home and thats before the government gets finished stealing as much as 25%. Cars cost far to much for the quali ty they deliver. Companies take way to little responsibility for it when they manufacture junk. I never buy any car new i always wait till then at least 5 yrs and now I am leaning more toward 10 yrs. When you build something that is crap and capibile of lasting 3 or 4 years and takes 5 or 6 to pay for……..even i can do that math.

  32. There is a documentary by DW(official German broadcaster) on the way the German car industry is staring at a bleak future by not being able to change from diesel and combustion engine cars to Electic.

  33. The near future and beyond will see Asian know how and, Asian prices destroy the Euro/American car industry
    The next phase of industry relocation is underway. Don’t believe me? Remember the ship building industry, the UK does, now gone. Remember the motorcycle industry, UK lost that as well.

  34. "…companies like Volkswagon, Daimer or Toyota invest in research and development almost as much as the best known companies in Silicon Valley".
    #1 (Amazon) and #6 (Microsoft) are not Silicon Valley, they're Seattle!

  35. Tesla Killers
    Audi eTron – failed.
    Faraday Future – failed.
    Jauguar iPace – failed.
    Lucid Air – failed.
    Mercedes EQC – failed.
    Porche Taycan – failed.

  36. Buy the old cars you want within the next ten years and never let go. Even 90's American cars are selling for 10k. Really! a Corsica with 100k. Its like a growing market but its not being publicized. No one is paying attention.

  37. If you were an American oligarch watching this, how long would it take for you to figure out that it's in your best interest to transfer as much American wealth to countries like China and India as you can? After all, that's a new virgin market for you that is around 9 times the size of the US market. So what if the people who made you what you are are cast into poverty? Roll up your carpet-bag and head off to greener pastures.

  38. UAW doesn't care about the decline they want more money!! Since Amazon doesn't pay any taxes they can afford a lot of R&D funds

  39. Not possible to accept that my phone is smarter than a car that cost 100 times more. The electric parts inside cars (and modules) are just a shame. Obsolete technology, no innovations for decades, no scalable building platforms, nothing learned from programming principles, unprepared technicians, too large model lifecycles without renewing, no possibility to factory-upgrade after buying a model, just third party tunning, no innovative financial packages for purchasing cars. And many more. No vision. And above all, NEVER lie your customers. Because you can escape many times but if they catch you one time when stars allign, you are done, no matter what you will do. VW is dead, they will cease to exist as they are now and parts of bussiness will be shared between concurence. Soon, Porsche will try to escape. Taycan is a failure. Where is Seat? Skoda become a midget. Peugeot still exists? All Jaguar models are failures. Land Rover disappoints. Mercedes aren't the echelon anymore, bitten by the mediocrity. Toyota is hanging only by their good reputation. Fiat will survive because have less rope. Renault should rely on technology more, not just on their motors and on Dacia (real budget car). Bmw is kicking at least (last to have a digital dashboard), laser lights, had courage with i3 and i8 that must be continued in other modern forms and they kept and nurtured a clearer signature in terms of style, than the competition that seems lost in the dark. American cars (except Tesla, a tech company and Corvette is moving?) are shit, less innovation, just muscle in straight lines and dumb styling.

  40. I personally feel the car sales increase in the US is an anomoly considering the US middle class is in permanent decline. You can blame that on the rising cost of living for medical insurance, car insurance, gas and having to commute much further to get to work. I expect the next 10 years we will be seeing huge declines in US car ownership as American middle class continue to shrink and driving costs will finally squeeze them out.

  41. Uber, Lyft, and these companies hanging hopes on self-driving cars will fail.
    If the car is owned by some corporation, nobody will treat it well. People will use them as toilets & garbage receptacles… So after ever passenger they will require checking/cleaning. Then quality & comfort of the interior will suffer, for easy maintenance. Imagine ordering your self-driving car after a drunk person puked in it, or worse… A person dies in it after using as their rolling private spot to shoot-up & OD.
    Then in traffic… The self driving car will be bullied by any & every agressive driver. Other drivers will bump into it & think, 'oh, self driving…. Not me! Bye!'
    Imagine car theft groups finding a market for the parts…. They order a car & track it, then at a random intersection it gets jacked up & stripped of parts.
    So the cars are going to need sensors & cameras, above & beyond what they have now, they'll need anti-theft fasteners, or custom(expensive) parts that won't fit other cars, and the companies will constantly be attempting to charge others for damages if they can…..
    Or they'll just be cheap crap boxes that smell like a rolling sewer, and most people won't ride in them unless they have to…

    That will be reality.

  42. Your videos could get to the POINT and be 1/2 as long if you didn't show a worthless video clip every 3-4 seconds. Just saying… Gets annoying after about 5 min.

  43. Boy, Toy sure spends a lot of $$ for such boring crappy designs! WTF does M$oft do…I'm still usign WIndow 10 for the last 5-6 years and never paid for it.

  44. I see so many comments that people are saying what's wrong with the auto industry. All I know is that I'm not sure if I can afford a new one and I make decent money.

  45. What about the demographic/economic death spiral Europe/East Asia/Russia/and even Canada is entering after 2022??? Fewer young people = fewer products bough..The USA on the other hand is golden!!!Millennials is the largest generation in American history!

  46. Soon to be a explosion of independent car companies. All car companies will just buy their motor & batteries. Just PRINT a fiberglass/carbon fiber body. Every city with over 200,000 population will have a car assembly plant. Moving cars from Mexico costs $1,500, they will NOT, be able to compete with local assembled cars.

  47. Who wears a a white cotton wife beater with a silk Polynesian flower short…a guy who needs glasses for his cheeks of course…so how can a guy who talks about the future of cars still be stuck 50 years behind in fashion…

  48. China – Dec 17, 2019 25% tax on all combustion powered cars.. Tesla China factory begins delivery Dec 17. Wish this could happen in North America also.

  49. COMPANIES WON'T FORECAST A DECLINE IN CARS BUT THEY ARE ALREADY DECLINING SOME DOWN 40% JUST DON'T EXPECT THEM TO FORECAST IT … THEIR STOCKS WOULD TUMBLE

  50. The slowdown in Indian auto sector is mainly because of the automakers itself they didn't updated their technology according to the time didn't updated safety and emission norms and produced low quality cheap cars and tried to sale at a higher price level people are no fools and decided to rather wait for April 2020 so that they can purchase cars that are compatible with new safety and emission norms also was factor of largest NBFC's exit from market that starved the market from cash and credit and if you own a maruti thinking of future investment well scrappage policy is on their way rather purchase some good cars and I pray that crash safety norms comes as soon as possible automakers making fools by selling coffin's on wheels

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