Car production hit nearly 90 million in 2023, growing 9% year-on-year. But for 2024, the industry faces challenges with high inventories and muted demand, leading to intense pricing competition that squeezes profits.
European manufacturers expect a significant 20-25% drop in earnings in 2024. Meanwhile, suppliers could suffer due to destocking after chip shortage years.
Chinese carmakers, benefiting from strong exports in 2023, are set to grow further in 2024, potentially gaining more market share. In contrast, global carmakers might lose ground in China by 5-10%.
Non-Chinese manufacturers and suppliers are likely to see minimal or negative growth in 2024.
“Global legacy OEMs and their suppliers are the relative losers of this trend, which comes on top of their market share losses in China.” Wrote analysts at UBS in a note.
UBS projects a 1.4% increase in global car production for 2024, reaching 91 million vehicles. This forecast surpasses 2019 levels and nears the peak years of 2016-18.
The electric vehicle market might slow in the US and Europe due to reduced subsidies and limited affordable options. However, Chinese sales of NEVs could surge by over 30%. Globally, UBS predicts a 24% jump in EV sales, reaching a 19% market share.