The health crisis caused by the coronavirus has barely overcome the effects of the health crisis caused by the coronavirus, and amidst the shortage of electronic equipment, the automotive sector gathers at the German IAA mobility salon facing new challenges, while the delta variant threatens the economic recovery.
The Munich event, which opens its doors to the public this Tuesday (7), replaces the traditional Frankfurt International Motor Show focused also on mobility, instead of just cars. It will be an opportunity for manufacturers to meet the consumer after the restrictions imposed by Covid-19.
The show will be more electric than ever, as the European Commission is pushing for an end to combustion engines by 2035. Several manufacturers have taken a radical but expensive electric route.
Volkswagen, the second largest manufacturer in the world and the largest group represented at the show – in the absence of Toyota – does not exhibit any combustion-powered car.
Renault presents its electric model Mégane, a compact and connected sports car, which should boost the French group in the European market, according to its CEO, Luca De Meo. “We want to show with this car that driving an electric car can also be fun,” he declared.
For its part, Mercedes promises 660 km of autonomy for its large EQE sedan, destined to rival the Tesla.
BMW announces, looking to the future, an electric car dubbed “Circle” and 100% recyclable, made entirely from reused materials or renewable resources.
In full transition to so-called “zero emission” engines, the IAA will no longer be just about cars, but describes itself as a “mobility hall” and focuses on climate protection.
Therefore, conferences and driving tests will be held for all types of vehicles, from scooters to limousines (electric), and more than 70 brands of bicycles will also be presented to try to attract new audiences.
Nevertheless, several climate activist groups, including Greenpeace, promised protest actions during the event. This fair is typical “greenwashing” (misleading environmental advertising), condemned a representative of the environmental association BUND, Jens Hilgenberg.
On the other hand, the great challenge of electrification is aggravated by the lack of electronic components.
The year started off positively for the industry’s industrialists, who regained profits after a tricky 2020 year due to Covid-19, which caused plant closures and historic financial losses.
The world’s 16 largest groups achieved a total of 71.5 billion euros ($85 billion) of operating profit in the first half of 2021, according to an analysis by the EY bureau.
But the horizon looks more complicated now: the shortage of electronic components – a consequence of the economic recovery and the high demand for electronic devices – creates disorder in the production chains and overloads the market.
This led to the closure or suspension of factories or production lines of major manufacturers.
As a result, new vehicle sales prices rose 13.9% in August in the US, a record increase, according to analysts at JPMorgan.
“Automakers could sell more vehicles if there was no semiconductor crisis,” estimated German analyst Ferdinand Dudenhöffer.
The impact on profits could be felt in early 2022 as sales are still far from pre-crisis levels.
BMW expects supply chains to remain tight over the next six to 12 months, said the company’s chief executive, Oliver Zipse. He — who, like other industry executives, is battling production slumps due to a lack of semiconductors — said he saw no long-term problems, adding that the auto industry was an attractive customer for chip makers.
Also at the show, Daimler said it does not believe its long-term goals for electric vehicles will be affected by a shortage of semiconductors.
“We are also affected by the chip crisis. We are extending leasing contracts so that we can keep customers mobile,” said adviser Britta Seeger.
“We expect a certain level of volatility until at least the end of the year.”
US-based Qualcomm, the world’s largest supplier of semiconductors for cell phones, has announced that it will supply a chip for the digital dashboard of a new Renault electric vehicle. The company had already announced earlier this year an agreement with General Motors.
The Mégane E-TECH Electric should go on sale next year.
For his part, Volkswagen Chief Executive Herbert Diess said Europe’s biggest automaker still has a lot of work to do to become an automotive software maker, a key objective of its strategy to transform the company.
VW has merged all of its software efforts into one unit, Cariad, in hopes of being able to challenge Tesla and Alphabet in a field in which it traditionally does not play.
“We need more software culture, we don’t want to create another automotive entity,” Diess said at the show.
The biannual Munich event is one of the main international meetings in the sector that is trying to re-emerge after a disappointing 2019 edition in Frankfurt, the historic host city, which called into question its very existence.