There has been volatile growth with the European New Car market caused by economic instabilities in the European region. Volkswagen, Renault, PSA Group and Hyundai are market leaders and all are based in Germany, France, South Korea. Each group has a large brand portfolio offering different brands for consumers. This allows the companies to gain a large share of the market. Furthermore, R&D is aiding the companies to enhance products and meet customer needs.
Graph: Europe New Car Market Share by Percentage Share, By Value, 2018 (Source: MarketLine)
VW is the best selling car company in Europe with 18% market share. VW markets its vehicles under an umbrella of brands, including Audi, Seat, Skoda, Bentley, Bugatti, Lamborghini, Porsche, Volkswagen, Commercial Vehicles, MOIA, Scania and MAN. VW's four segments are (1) PassEnger cars (2) Financial Services (3) Commercial Vehicles and (4) Power Engineering.
Renault SA is the second best selling car company with 7% market share. The company manufactures and distributes light commercial vehicles, passenger cars and electric vehicles. Renault's alliance is with Nissan Motors and brands include Renault, Dacia, Alpine, Lada, Renault Samsung Motors.
PSA Group is the third best selling car company with 5% market share. PSA designs, develops and manufactures passenger cars, light commercial vehicles, scooters and motorcycles.
The strategies the leading players focus include R&D. VW has strong R&D capabilities which facilitate developments and enhance existing products, thus maintaining a strong market position. VW concentrates on product portfolio expansion as well as improvements with functionality, quality, safety and environmental compatibility of group products. VW is also focussing on electrification of the vehicle range to create an efficient range of engines and lightweight construction. VW has a strong brand portfolio helping it to enhance its market share in key global markets and leverage brand strength and growth. The VW portfolio covers all segments (motorcycles, subcompact cars, heavy trucks and buses.) The portfolio includes consumption optimized engines. The portfolio allows VW to have presence in all relevant automotive world markets. The group has a competitive advantage with its large brand portfolio, steadily growing presence and wide range of financial services.
Headline statistics
1. The European new cars market grew by 1.5% in 2018 to reach a value of $509.1 billion
2. In 2023, the European new cars market is forecast to have a value of $642.7 billion, an increase of 26.2% since 2018.
3. The European new cars market shrank by 0.9% in 2018 to reach a volume of 17,025.6 thousand units
4. In 2023, the European new cars market is forecast to have a volume of 19,390 thousand units, an increase of 13.9% since 2018.
5. Germany accounts for 25.3% of the European new cars market value.
6. Volkswagen is the leading player in the European new cars market, generating a 18.1% share of the market's value.
7. Rivalry within the new cars market is intensified by the existence of large-sized companies and the high fixed costs associated with car manufacturing. However, the relatively small number of large companies in the market, due to the large economies of scale required, mitigates competition. Differentiation is a fundamental aspect of competition in the new cars market, and that serves to alleviate rivalry to some extent.
Source: MarketLine Industry Profile, New Cars in Europe, January 2020
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