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Auto Leaders Switch To Live-Streaming To Spread Geneva News

Auto Leaders Switch To Live-Streaming To Spread Geneva News.

“Those with big positions in China right now are most in danger; it is a big source of sales and profit”

You might have thought the cancellation of the Geneva Auto Show because of the coronavirus would have curbed traditional hype and bluster from European automotive leaders, but they stayed home and did it online instead.

Only one of the German auto industry leaders, Chairman of Mercedes parent Daimler, Ola Kaellenius, mentioned the elephant in the room, the possible ramifications from the coronavirus. BMW and Volkswagen concentrated on their new products instead.

Other leaders of European companies, like Renault of France and Toyota, remained silent in their public utterances on the implications of the coronavirus. Usually at big shows, Ford, Groupe PSA, Volvo and Nissan take the chance to express their views on the state of the world, but these companies were among those who pulled out, on cost savings grounds, weeks before the current show was cancelled because of the health alert. 

Other no shows included Cadillac, Jaguar, Lamborghini, Land Rover, Mitsubishi, Subaru, Tata, and Tesla.

“We are monitoring the situation (with the coronavirus) of course, with day to day management of the situation. Production is back up and running in China, It’s too early to say how this will work out,” Kaellenius said via an online link from the company’s Stuttgart headquarters.

Mercedes had planned to launch the updated E-class sedan at the Geneva show. It did this online instead.

Earlier, Reuters reported from Frankfurt that Daimler’s car production in China was stable and supply chains secure, according to Mercedes sales chief Britta Seeger. It was too early to forecast the impact of coronavirus on Mercedes’ sales, according to Seeger.

Analysts like automotive consultant EY partner Peter Fuss were taking a cautious view on the implications of the virus.   

“The automotive industry is a global industry with a very integrated supply chain. Therefore, any disruption in the global automotive supply chain will impact every regional market – either by less sales of cars or because of shortage of parts necessary for the production of cars. Due to the complexity of the coronavirus, no serious projection of impacting the global automotive industry can be made at this stage,” Fuss said.

Felipe Munoz, the global automotive analyst at JATO Dynamics, pointed out that some companies, criticised for being too slow to see the potential in China, might be feeling some relief.

“Those with big positions in China right now are most in danger; it is a big source of sales and profit. Those with a low presence there – like FCA (Fiat Chrysler Automobiles) and Groupe PSA – won’t be affected that much, but it will be huge for Volkswagen and the Germans and getting worse,” Munoz said.

According to Professor Ferdinand Dudenhoeffer, director of Germany’s Center for Automotive Research (CAR), German auto companies have annual China business worth about $170 billion, close to 35% of its annual global sales.  Dudenhoeffer said this China business earns high profits, and roughly 40% of German annual auto profits are in danger.

“This makes clear that 2020 will be a very difficult year for the German auto industry,” Dudenhoeffer said.

Dudenhoeffer accepted that because of the dynamic nature of the spreading coronavirus it was very difficult to assess the extent of the danger.

“It is no longer just about the stability of supply chains, but there is more and more demand loss is an increasing dimension to be discussed. Production lost due to interrupted supply chains can often be caught up again. The cessation of economic growth and the drop in demand are permanent effects,” he said.

Oliver Zipse
Meanwhile BMW board chairman Oliver Zipse, in a similar transmission from Munich, unveiled a concept version of its new electric sedan, the i4, claiming it could travel 400 miles on one charge, and said the company planned to launch an all-electric SUV, the iX3.

Volkswagen, from its HQ in Wolfsburg, said its first car designed from the start to be all electric, the ID.3, would go on sale in the summer. No mention of alleged production problems with the ID.3, said to be delaying its appearance, according to German investment bank Norddeutsche Landesbank Girozentrale. Automotive News, quoting Germany’s Manager Magazin, has said this is down to “massive software glitches”.

The relative ease with which auto makers quickly changed tack from live presentations at the Geneva show to using the internet, might be the straw that broke the back of the traditional auto show, according to David Leggett, Automotive Editor at GlobalData.

“Live-streaming new product presentations may well be seen as a better way forward for manufacturers concerned over the costs and diminishing effectiveness of exhibiting at trade shows,” Leggett said.

“The organizers of motor shows have plenty to think about in terms of staying relevant when the coronavirus crisis is over. But it does look like the traditional motor show event and format is looking a little tired,” he said.


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