Car companies are budget-conscious \"business experience\": to create electrification \"moat\"-reprinted

Image source: BMW Group official website

The epidemic is still spreading around the world, and all industries are covered by huge uncertainties. Although a solid family can protect you for a while, it will also be enough to make a large enterprise in trouble over time.

After the first quarter and the second quarter, car companies that have always invested 100 million as a unit of measurement have a dazzling sales report and financial deficits that usually make them rich. They also have to start reevaluating the use of each penny. Spending every penny in the post-epidemic era.

Layoffs and pay cuts

Faced with huge daily expenses and sluggish market demand, layoffs have become the first choice of major car companies. Mercedes-Benz parent company Daimler announced plans to lay off at least 10,000 people globally, including about 10% of its management staff, by the end of 2022. The size of the layoffs is equivalent to 3% of Daimler's global employees. Earlier, the same luxury brand Audi also said that it will lay off 9,500 people in the next 6 years, this figure accounts for 10.6% of the total number of employees.

In September 2019, Zipzer, who had just assumed the role of the new BMW CEO, publicly stated that BMW will not take strong sanctions measures until the end of 2020. However, with the outbreak of the new crown epidemic, the commitment at that time was ultimately lost to reality. On June 19 this year, BMW announced that it will cut 6,000 jobs.

This is still true of traditional luxury brands, and the situation of other brands can be imagined. Volvo, General Motors, FCA, Nissan, Jaguar Land Rover and other companies have also announced plans for layoffs. Among them, the number of Jaguar Land Rover layoffs reached a staggering 20,000, which means that half of the employees will be unemployed. In addition, with the layoffs, there are some companies that seek to find the optimal solution to the cost burden by reducing employees’ working hours and other measures to reduce pay in disguise.

At the same time, there are still some car companies investing in the abacus of throttling to the previous \"unremarkable\" expenses.

In mid-June, Mercedes-Benz officially issued a statement saying that it will close the experience store in Sanlitun at the end of June, and suddenly closed the world's largest brand experience store that combines catering, entertainment, boutique shopping, and product display. The explanation given by Mercedes-Benz is: The experience store has completed its mission. Considering the financial performance of its parent company Daimler Group, which fell by 64.5% year-on-year in 2019, and the net profit of 95.5% in the first quarter of this year, it is easy for the outside world to associate the closure of the experience store with the company's current financial situation. Previously, according to people familiar with the matter, the experience center with a total area of ​​2400 square meters only requires tens of millions of operating expenses each year. \"This money may be insignificant in normal times, but in a special period, it also explains what ‘fly legs are also meat’.\"

And Tesla, which has always emphasized cost control, started an attempt to close offline experience stores earlier. In the North American and Chinese markets, Tesla is gradually turning its sales channels to online. Domestically, Tesla has closed two experience stores in Beijing Chaoyang Joy City and Shanghai Pudong Kerry Center last year.

She seeks far and near, automatic driving becomes \"victim\"

Layoffs, pay cuts, or closing offline experience stores can certainly save costs, but compared to the real money that was smashed in the long-term strategy, it is still a rare thing. Therefore, in a special period, some forward-looking but short-term invisible investments are bound to be affected.

On June 19, BMW and Mercedes-Benz announced that they would suspend research and development cooperation in the next generation of autonomous driving. It should be noted that this is less than a year after the two parties signed a long-term cooperation agreement on autonomous driving. In the statement, both parties also said that they still have a high degree of agreement on issues such as autonomous driving safety and customer benefits, and they may compound in the future. Although it is not explicitly stated, the subtext of this sentence is to wait for money to cooperate again.

Regarding the short marriage between BMW and Mercedes-Benz, industry experts commented: \"Although the prospect of autonomous driving is good, the effect is slow and the uncertainty is large. The company’s management is responsible to shareholders and must invest resources in the short term. Effective technology goes up.\"

Not only are OEMs beginning to re-evaluate the current value of autonomous driving, but travel companies that are at the forefront of technology are also joining. According to incomplete statistics, companies such as Waymo, Cruise, and Uber have also halted testing projects related to autonomous vehicles.

Similar to the situation of autonomous driving, hydrogen fuel cell vehicles that represent new energy \"ultimate form\" also face the same problem.

Before ending its short-term cooperation with BMW, Mercedes-Benz has announced that it will abandon the development of hydrogen fuel cell passenger car projects. Mercedes-Benz believes that the production of hydrogen fuel cell vehicles is equivalent to twice the production cost of pure electric models, and the cost is too high.

According to the survey results of consulting company IHS Markit on OEMs and parts manufacturers, most of the interviewees said that projects that take 6 to 7 years to produce a profitable effect will be the first to be stopped.

Create electrification \"Moat\"

If self-driving, hydrogen fuel cell cars look too far away, and there is room for buffering, then what is electrified is what the current car companies cannot wait for and cannot afford. In other words, a large part of the above savings measures have been injected into the development of electrification.

Among them, Volkswagen Group is the most active for electrification. In May this year, it announced that it would increase its shareholding in Jianghuai Volkswagen to 75% and purchase a 26% stake in the battery production company Ningde Times for 1.1 billion euros, becoming the latter’s largest shareholder; Acquired the remaining 0.36% of Audi’s shares at a price of 100% and controlled 100% of the Audi Group. Increasing the share of joint venture companies, acquiring leading sub-brands in the field of electrification, and investing in upstream and downstream companies in electrification, Volkswagen’s goal is very clear. Under the wind of the automobile industry, it is necessary to realize and build self-research, self-production, self-production The supply of new energy industry is closed-loop, seizing the advantage of the industry's position change.

According to the Volkswagen Group's plan, the original plan to produce 1 million electric vehicles in 2025 will be advanced to 2023. In addition, from 2020 to 2024, 33 billion euros will be invested in electrification.

Under the epidemic, Toyota also insisted on electrification. This year was defined by Toyota as its first year of electrification. In the first half of this year, Toyota launched three models of CH-R EV, Ezer E Jinqing and Lexus UX300E. By 2025, Toyota will have a total of 10 electric models entering the Chinese market.

At other levels, Mercedes-Benz is also unequivocal about the investment in electrification. After the launch of the brand's first pure electric model EQC, there will be pure electric SUV EQA and pure electric MPV EQV released this year.

Regarding the different response measures made by car companies under the epidemic, some experts told Sina Auto that the epidemic may be a watershed in the change of the car company's structure. Some car companies have to slow down their investment in electrification and autonomous driving in order to solve the survival. But there are also car companies that are under pressure, and even increase investment and R&D efforts. This may not show the gap at the moment, but when the epidemic is over, this may become an insurmountable \"moat\" for opponents. After all, they are just getting started. In the new energy market, time advantage is crucial.