European carmakers have been struggling amid high production costs, severe competition, and stagnating electric vehicle (EV) demand in major EV markets.
In September, Volkswagen lowered its 2024 outlook, citing a “challenging market environment and developments that have fallen short of original expectations.” Later, VW confirmed it is planning to close at least three plants in Germany as part of cost-cutting measures, the first domestic plant closure in Volkswagen’s 87-year history.
“Our nine-month results reflect a challenging market environment and underline the importance of delivering on the performance programmes we have launched across the company,” said the group’s financial officer, Arno Anlitz. “A significantly improved order intake in Western Europe in Q3 year-on-year is testament to our strengthened product line-up, from combustion engine cars to hybrids and full-electric vehicles, and provides tailwind for the final quarter.”
The Volkswagen Group expects deliveries to customers to be around 9 million vehicles this year compared to 9.24 million in 2023. Revenue is projected at around €320 billion compared to €322.3 billion last year.
Audi Group, part of VW, does not provide any forecasts regarding market demand. However, it notes its production is flexibly based on the market demand of the respective model.
“Regarding the supply situation, we can see that the supply situation on semiconductors will stabilise over the course of 2024, both in terms of the number of critical semiconductor types and the quantity available,” it tells Kallanish. “Nevertheless, we must continue to prepare for demand peaks and see the risk of a broader undersupply as early as the end of 2025. An easing of the supply situation depends largely on the semiconductor industry.”
Audi adds it has been working in partnership with its steel suppliers for many years and has concluded framework agreements with them. “Both the direct procurement of steel and the indirect purchase by the suppliers are guaranteed by longer-term contracts with the steel mills,” it adds.
Skoda Auto is meanwhile bucking the trend, outpacing the overall European market. Deliveries to customers in the first nine months of 2024 increased to 671,300 vehicles, up by 4.5% on-year. This growth was supported by a strong third quarter, with 222,700 vehicles delivered, up 6% on-year.
Mercedes-Benz Group generated solid sales in Q3 despite product transitions, a challenging market environment and fierce competition, particularly in China.
“The assumptions regarding the economic situation and the development of automotive markets continue to be characterised by a degree of uncertainty,” Mercedes said. “In addition to unexpected macroeconomic developments, uncertainties for the global economy and the business development of the Mercedes-Benz Group may arise in particular from geopolitical events and trade policy. The outlook regarding the growth of the world economy continues to be rather modest with regional differences.”
The US economy remains robust, while economic growth in the eurozone is expected to stay below average. However, in China, the recently announced monetary and fiscal stimuli should revive growth somewhat during the rest of the year, Mercedes forecasted.
Stellantis reported Q3 consolidated shipments of 1.14 million units, down 279,000 or 20% on-year. The period saw production gaps in several models as the firm began a global product transition. It also implemented North American inventory reductions and was hit by headwinds from a challenging European market environment.
Net Q3 revenue of €33 billion ($35 billion) fell 27% compared to Q3 2023, primarily due to lower shipments and unfavourable mix, as well as pricing and foreign exchange impacts.
Renault Group’s revenue increased in January-September by 8% on-year to €37.7 billion.
“Our Q3 revenue is starting to benefit from our unprecedented product offensive, with ten new launches this year, representing 18% of our invoices over the quarter,” said company chief financial officer Thierry Pieton. “This trend will continue over the next quarters in line with the gradual introduction of vehicles on their respective markets and will accelerate further with the seven new launches planned for 2025. This appealing and competitive line-up, with both electric and ICE & hybrid vehicles, demonstrates our flexibility to adapt whatever the pace of EV transition and remains a key support for the Group’s performance together with cost reduction.”
Gestamp’s earnings declined on-quarter and year-on-year in Q3 and the nine months through September. The short-term outlook remains extremely challenging due to declines in production volumes, uncertainty and volatility in Europe given the slowdown in electric vehicle penetration, and the negative impact of foreign exchange, it noted.
Most carmakers did not provide details of future production programmes or targets when asked by Kallanish.
Svetoslav Abrossimov Bulgaria
