Auto giants doubt that the drop in sales in China will stop. That is why they give gloomy forecasts for this year. Toyota, General Motors and Daimler believe that 2019 will be extremely weak for the global auto industry. The companies’ results over the past year do not please. Daimler that produces Mercedes has reduced the profit by almost 30% to 7.6 billion euros. Last quarter Toyota’s revenues fell by 80%, while GM’s profits reduced by 8%.
These three companies own about a fifth of the market, so their opinion is worth listening to.
According to Dhivya Suryadevara, Chief Financial Officer of GM, the situation in the Chinese market will not improve in the near future. She associates the deterioration of the company’s results with the rise in commodity prices caused by the conflict between the PRC and the States. Last year, GM lost about a billion US dollars. It is predicted that this year the loss will be at the same level.
Other manufacturers, such as Ford and Volkswagen, also point out the negative effect of reduced sales in China.
Daimler CEO Dieter Zetsche, who is going to leave the post in May, said that the company would conduct a cost-cutting program. Funds thus freed up will be used for the development of the technologies for electric and autonomous cars.
Toyota has changed its forecast for the current fiscal year, which will end in March, lowering the profit to $ 17 billion.
Previously, diesel cars were in great demand and were the basis for the growth of the auto market. Now companies, trying to stay afloat, close their production and adapt to the decline and reduction in sales.
Cycling of ups and downs in the car market is common, but this time companies have to bear the high costs associated with the development of new technologies. Because of this, many manufacturers are merging with competitors to reduce the cost of creating technologies for the assembly of electric cars and cars with automatic control.
The indicator of car manufacturing companies in the USA has decreased by 16.5% since the beginning of last summer. European indices have lost about 18% over the same period.
Experts believe that in 2019 Daimler will have big problems. Analysts agree that it will be better for the company if it increases the efficiency of the unit producing cars under the Mercedes brand.
General Motors warns that profits from sales and operations in China will fall dramatically. GM was the first company to start closing plants in America and reducing the staff.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade