Financial, Economic and Social Mood Update (May 1, 2019)
In the April 2019 monthly blog we looked at how the modern day automotive industry (the core of global manufacturing) is consolidating by country, by region, by brand and above all by automotive group or alliance. To recap, the largest global players in terms of unit market share by group or alliance are 1) Volkswagen of Germany (29 percent), 2) Geely of China (19 percent), Honda of Japan (14 percent), Peugeot of France (updated and raised to 12 percent compared to the last analysis due to Peugeot’s motorcycle manufacturing relationships with both Yamaha and Mahindra), Toyota of Japan (10 percent), Hyundai of Korea (7 percent) and General Motors of the USA (7 percent).
The largest global vehicle market today is China, and the Volkswagen brand name has been number one in China for 30 years and counting – since 1989. 50 percent of all Volkswagen brand vehicles are sold in China (the Volkswagen brand name being the largest marque within the even larger Volkswagen Group). The Volkswagen Group recently launched a brand new entry level marque specifically for the Chinese market under the name “Jetta.” The Volkswagen “Jetta” is of course the sedan version of the Volkswagen “Golf” hatchback – the Volkswagen “Golf” being the modern day successor of the original and venerable Volkswagen “Beetle” economy car. The new “Jetta” brand name is targeted and younger, first time car buyers in the large Chinese market and will include 3 models – one sedan (the “Jetta” itself) plus two SUVs (sport utility vehicles). The “Jetta” brand will be manufactured by the Volkswagen-FAW (First Automotive Works) joint venture in China. There will be 200 brand new retail dealerships across China by December 31, 2019 and these retail outlets will be concentrated in digital showrooms, mobile sales trucks and shopping malls. The core entry level product will be the “Jetta” sedan, which will retail for the equivalent of 5,000 to 6,000 Euros – an absolutely tremendous value in the entry level segment which definitely returns Volkswagen back to where it must be.
Volkswagen made its good name with the original and venerable “Beetle” economy car, which became the most produced car (automotive platform) in history. The endearing attributes which made Volkswagen so successful include true value, true economy, high build quality and reliability. Add to these facts that the new “Jetta” provides a ride and driving quality which its price segment competitors do not match.
Update on Worldwide Electric Vehicle Sales & Projections
400,000 new electric vehicles were sold globally in 2015, and this year that number should reach about 3 million units (out of a total new vehicle market of 93.4 million new cars and trucks). The projections for electric vehicle market share in the worldwide new vehicle sales market are as follows: 12 percent of the total by 2025, 36% by 2030, 57 percent by 2035, 78 percent by 2040 and 99 percent by 2045. The advances already being made in battery technology can be compared to recent advances in computer and cellular telephone technology – in other words, miniaturization accompanied by quantum leaps in performance. This translates into smaller engines, lighter engines, engines with far fewer moving parts, higher speeds and quicker acceleration. The largest electric vehicle manufacturer in the world today is BYD (“Build Your Dreams”) of China. A major shareholder in BYD is Berkshire Hathaway of Omaha, the large holding company led by Warren Buffett of Nebraska.
The CB Association
This month’s blog has a special link to “The CB Association,” a non-profit charity organization named for my 3rd degree cousin Cecilia “Cibbie” Barredo Borromeo Lutz (1950-2019) who suffered from amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. She passed away surrounded by her immediate family members (her husband and children) in Switzerland on April 30, 2019. Amyotrophic lateral sclerosis (ALS), also known as motor neurone disease (MND) or Lou Gehrig’s disease, is a specific disease that causes the death of neurons controlling voluntary muscles. Some also use the term motor neuron disease for a group of conditions of which ALS is the most common. ALS is characterized by stiff muscles, muscle twitching, and gradually worsening weakness due to muscles decreasing in size. It may begin with weakness in the arms or legs, or with difficulty speaking or swallowing. About half of the people affected develop at least mild difficulties with thinking and behavior and most people experience pain. Most eventually lose the ability to walk, use their hands, speak, swallow, and breathe. Here is the link to a YouTube video about the foundation: https://www.youtube.com/watch?v=By_JleRQllE&fbclid=IwAR3Wp9gF8HSRwk2O0-uOoNqmsCs0WiQoX2jZDTVywmHqUW8Tt-2YTttQsko
