Traditional vehicle manufacturers face uncertain future
Dealerships expect electrification and competition from China to drive traditional vehicle manufacturers out of business.
According to April’s Startline Used Car Tracker, 62% of dealerships believe the combination of the cost of going electric and the challenge of competing with cheaper brands from China will drive at least one major European vehicle manufacturer out of business in the next 10 years.
Other factors highlighted by the survey include new technologies such as autonomous vehicles leaving more established brands behind, plus waning brand loyalty from customers.
However, 21% of dealers believe European car makers will survive through mergers or acquisitions, 18% think that they are already competing successfully with Chinese companies, and 18% are confident that brand and design strength will save them.
Huge pressure
Paul Burgess, CEO at Startline Motor Finance, said: “The level of competition in the new car market prompted by new entrants alongside the very high degree of investment required to electrify means this might be the toughest moment many long-established and storied European car makers have faced in living memory. They are under huge pressure.
“Our research shows a majority of dealers don’t believe all these companies will survive into the mid-2030s as a result. However, others think mergers and acquisitions, market protections and sheer brand strength will play a part in their preservation.
“It’s also interesting that almost one in five believe European car makers are already becoming more competitive with their Chinese counterparts and certainly some, such as Renault and BMW, appear to be successfully embracing electrification as an opportunity.”
