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In Europe, began to prepare for the inevitable decline in car sales

Speaking at the Conference, Justin Cox, Director of Global Production of LMC Automotive, spoke about the prospects of production, sales and exports of light cars in Europe. He noted that the world car market is growing for the ninth year in a row. But in the future, positive risks can be prevented by existing risks.

Europe is worried about the future of cars, which for Ukraine can be successful. ECG Conference

How do national logistics operators prepare for the growth of the electric vehicle market?

In Europe, began to prepare for the inevitable decline in car sales

The possible prospects for the decline in car sales in the European market, as well as about the reduction in exports of European automotive manufacturers, began to speak immediately after the announcement of brexite by the UK. But today the situation was aggravated by other risks for the European market. Although, until now everything is not clear with the very brixite. But the UK exports 30% of its automotive output outside Europe. Therefore, there are two scenarios: pessimistic and optimistic, in which there is almost no optimism.

In Europe, began to prepare for the inevitable decline in car sales

To protect the logistics, investments are needed in the repair and maintenance of roads, bridges, tunnels and ports of the EU countries. But some governments are not interested in developing transport infrastructure. And breksit strongly hits the European budget, which could be used for this, the European Parliament member Ines Ayala Sender said at the conference. And this is one of the risks.

In Europe, began to prepare for the inevitable decline in car sales

According to the forecast of Justin Cox, after the final withdrawal of the UK from the European Union in 2020, the European car market will be reduced by 1 million units. And according to the optimistic scenario, the total sales in the European market will amount to 3 million cars a year. And according to the pessimistic – 2.5 million.

In Europe, began to prepare for the inevitable decline in car sales

Most of all exports to the UK are German automobile concerns. There goes 1/3 of the products of the European Ford, many exports Spain. But from the UK there is an export BMW, MINI, Nissan, Honda, Jaguar Land Rover, Bentley and others. And in BMW Now they are seriously thinking about the possibility of transferring British production to China. That because of the range of delivery will make cars more expensive. But it will still be more profitable than payment of possible duties on British products, as not produced in the EU. And this is also a risk.

But the most terrible thing is uncertainty, since no one knows exactly what will happen after the brecci. And uncertainty is known to have a bad effect on car sales.

The forecast for the growth of the European automotive market for 2018 is only 2.3% compared to 2017. And basically this growth will come at the expense of buses. Even in countries such as Germany has already slowed the pace of production and sales of cars.

In Europe, began to prepare for the inevitable decline in car sales

At the same time, in China – market growth + 40%, in India – + 14%, in Brazil – + 7%, and even in Iran more than in Europe – + 3%.

When the drivers are finally driven out from behind the wheel of the car? Overview of autopilot systems

Car logistics operators are preparing for “network cars”. Results of the ECG 2017 Congress in Malta

Risk is also a US protectionist policy for its automotive manufacturers. After all, 25% of cars are exported from Europe to America. For example, in the European branches of Daimler, 12% of production goes to the USA, Audi has 14%, BMW – 15%, VW – 25%, Bentley – more than a quarter, y –Lamborghini – more than a third.

In Europe, began to prepare for the inevitable decline in car sales

Another threat to the European automobile market is the strengthening of requirements for harmful emissions into the atmosphere. And then everything is not as simple as it might seem at first glance. After all, the wide distribution of cars with diesel engines, in due time motivated the Kyoto Protocol. According to it, producers had to reduce CO2 emissions. And they have diesel engines less than gasoline engines. But unlike gasoline power units, diesel engines cause great damage to the environment by the release of particulate nitrogen dioxide. Last year, 70 German cities reported an excessive level of NOx, which could cause problems with breathing and premature death. A similar picture emerged in Britain, France and Italy.

Therefore, many potential European buyers decided to postpone the purchase of a new car at all until the situation is clear.

In Europe, began to prepare for the inevitable decline in car sales

But the complexity of the “diesel against gasoline” situation is also in the fact that the reduction in sales in Europe of cars with diesel power units has increased the overall level of CO2 emissions. And if European producers do not comply with the rules for harmful emissions, they risk receiving a fine of 4.5 billion euros. But the new engineering solutions that automakers are forced to find and use to reduce harmful emissions make cars more expensive. Even more expensive are the operation of cars with ICE taxes on harmful emissions.

In Europe, began to prepare for the inevitable decline in car sales

ECG Executive Director Mike Sturgeon introduced a new test to measure fuel consumption and CO2 emissions of WLTP. This new improved laboratory fuel test replaces NEDS, which has been in use since the 1980s. WLTP is supplemented with a test Real Driving Emissions (RDE), which will measure emissions of pollutants when driving in real traffic conditions on the road. WLTP will provide a much more accurate basis for calculating fuel consumption per vehicle and CO2 emissions, as it reflects more real factors and, consequently, car performance on the road. This test will be applied to all new vehicle registrations as early as September 2018.

Speaking at the Conference, Justin Cox, Director of Global Production of LMC Automotive, spoke about the prospects of production, sales and exports of light cars in Europe. He noted that the world car market is growing for the ninth year in a row. But in the future, positive risks can be prevented by existing risks.

Europe is worried about the future of cars, which for Ukraine can be successful. ECG Conference

How do national logistics operators prepare for the growth of the electric vehicle market?

In Europe, began to prepare for the inevitable decline in car sales

The possible prospects for the decline in car sales in the European market, as well as about the reduction in exports of European automotive manufacturers, began to speak immediately after the announcement of brexite by the UK. But today the situation was aggravated by other risks for the European market. Although, until now everything is not clear with the very brixite. But the UK exports 30% of its automotive output outside Europe. Therefore, there are two scenarios: pessimistic and optimistic, in which there is almost no optimism.

In Europe, began to prepare for the inevitable decline in car sales

To protect the logistics, investments are needed in the repair and maintenance of roads, bridges, tunnels and ports of the EU countries. But some governments are not interested in developing transport infrastructure. And breksit strongly hits the European budget, which could be used for this, the European Parliament member Ines Ayala Sender said at the conference. And this is one of the risks.

In Europe, began to prepare for the inevitable decline in car sales

According to the forecast of Justin Cox, after the final withdrawal of the UK from the European Union in 2020, the European car market will be reduced by 1 million units. And according to the optimistic scenario, the total sales in the European market will amount to 3 million cars a year. And according to the pessimistic – 2.5 million.

In Europe, began to prepare for the inevitable decline in car sales

Most of all exports to the UK are German automobile concerns. There goes 1/3 of the products of the European Ford, many exports Spain. But from the UK there is an export BMW, MINI, Nissan, Honda, Jaguar Land Rover, Bentley and others. And in BMW Now they are seriously thinking about the possibility of transferring British production to China. That because of the range of delivery will make cars more expensive. But it will still be more profitable than payment of possible duties on British products, as not produced in the EU. And this is also a risk.

But the most terrible thing is uncertainty, since no one knows exactly what will happen after the brecci. And uncertainty is known to have a bad effect on car sales.

The forecast for the growth of the European automotive market for 2018 is only 2.3% compared to 2017. And basically this growth will come at the expense of buses. Even in countries such as Germany has already slowed the pace of production and sales of cars.

In Europe, began to prepare for the inevitable decline in car sales

At the same time, in China – market growth + 40%, in India – + 14%, in Brazil – + 7%, and even in Iran more than in Europe – + 3%.

When the drivers are finally driven out from behind the wheel of the car? Overview of autopilot systems

Car logistics operators are preparing for “network cars”. Results of the ECG 2017 Congress in Malta

Risk is also a US protectionist policy for its automotive manufacturers. After all, 25% of cars are exported from Europe to America. For example, in the European branches of Daimler, 12% of production goes to the USA, Audi has 14%, BMW – 15%, VW – 25%, Bentley – more than a quarter, y –Lamborghini – more than a third.

In Europe, began to prepare for the inevitable decline in car sales

Another threat to the European automobile market is the strengthening of requirements for harmful emissions into the atmosphere. And then everything is not as simple as it might seem at first glance. After all, the wide distribution of cars with diesel engines, in due time motivated the Kyoto Protocol. According to it, producers had to reduce CO2 emissions. And they have diesel engines less than gasoline engines. But unlike gasoline power units, diesel engines cause great damage to the environment by the release of particulate nitrogen dioxide. Last year, 70 German cities reported an excessive level of NOx, which could cause problems with breathing and premature death. A similar picture emerged in Britain, France and Italy.

Therefore, many potential European buyers decided to postpone the purchase of a new car at all until the situation is clear.

In Europe, began to prepare for the inevitable decline in car sales

But the complexity of the “diesel against gasoline” situation is also in the fact that the reduction in sales in Europe of cars with diesel power units has increased the overall level of CO2 emissions. And if European producers do not comply with the rules for harmful emissions, they risk receiving a fine of 4.5 billion euros. But the new engineering solutions that automakers are forced to find and use to reduce harmful emissions make cars more expensive. Even more expensive are the operation of cars with ICE taxes on harmful emissions.

In Europe, began to prepare for the inevitable decline in car sales

ECG Executive Director Mike Sturgeon introduced a new test to measure fuel consumption and CO2 emissions of WLTP. This new improved laboratory fuel test replaces NEDS, which has been in use since the 1980s. WLTP is supplemented with a test Real Driving Emissions (RDE), which will measure emissions of pollutants when driving in real traffic conditions on the road. WLTP will provide a much more accurate basis for calculating fuel consumption per vehicle and CO2 emissions, as it reflects more real factors and, consequently, car performance on the road. This test will be applied to all new vehicle registrations as early as September 2018.

In Europe, began to prepare for the inevitable decline in car sales

To date, the new requirements are already fully in line with Volvo, Mitsubishi, Toyota, Lexus, Daimler, Jaguar, Land Rover, Peugeot, Citroen DS, Nissan, Infiniti, Renault Group.

In Europe, began to prepare for the inevitable decline in car sales

So the European automobile giants are stimulating not only to improve their petrol engines, but also to quickly move to electric vehicles. However, there is a problem.

According to forecasts of the largest German union IG Metal, if, as planned by the EU program, 25% of all cars will be electric, 15% – hybrid and 60% – gasoline and diesel by 2030, in Germany, perhaps 75 000 jobs. A faster transition to electric vehicles threatens the German automotive industry with the loss of 100,000 jobs. Basically, these are workers engaged in the production and assembly of internal combustion engines and gearboxes.

In Europe, began to prepare for the inevitable decline in car sales

In addition, for electric vehicles in the EU countries, the infrastructure has not yet been fully prepared. And it’s not just about charging stations, but about increasing the load on the network, which can affect the increase in the cost of electricity. So – to buy electric cars will be even less than cars with ICE.

In Europe, began to prepare for the inevitable decline in car sales

According to AUTO-Consulting CEO of AvtoLogistics Pavel Gaidai, who participated in the ECG Conference in Madrid, some European logistics operators are so pessimistic that either they are already out of this business or plan to do it before 2020. According to Mr. Gaidai, the risks of falling production, export and sales in Europe are so great that today many refuse to renew the fleet of auto transporters. They believe that new trucks simply will not have time to pay off before, and even more so after the stagnation of the European automobile market began. And this is a very alarming signal.

In Europe, began to prepare for the inevitable decline in car sales

Details about the risks that threaten the European car market, the analysis of possible scenarios, as well as how this will affect the prices of cars in Ukraine, AUTO-Consulting will tell in the coming days.

Kiev-Madrid-Kiev

How the online car business works

Will there be digital showrooms and will car dealers be needed? The era of online car sales is approaching

Meet The New Brand That Wants To Turn The Industry Upside Down

Lynk & Co wants to shake up the car industry – and not just in a Kia’s-seven-year-warranty kind of way, it wants to fundamentally change the way we interact with car companies and buy their stuff.  Company boss Alain Visser is the man putting it all together – he’s a good-humored Belgian with a steely undercurrent. 

"We see more and more around the world that young people willing to spend a lot on mobility, whether it’s Uber or the train, but they don’t want a big outlay all at once," he explains. "They are willing to spend $500 or $600 a month to go to concerts. It’s the metrics of the Spotify concept, that’s the market we’re looking at. With us, you’ll only have to commit for one month."

Lynk and Co’s cars are going to be available exclusively through the firm’s new subscription setup – you pay a fixed fee each month, you get a car, and Lynk looks after all the boring stuff. Visser says that not only does the subscription model set the company apart, but it’s what the driving public wants. "In 10 years" time subscription will be like leasing is today. "Customers aren’t willing to pay $1,100 or $1,400 a month, they want to pay $700."

The company will have some brand stores around the place, but they won’t be out of town like car dealerships, but rather right in the middle of the cities. 

Meet The New Brand That Wants To Turn The Industry Upside Down
Meet The New Brand That Wants To Turn The Industry Upside Down

Ordering will be able to be done online, and Visser says that they could even manage same-day delivery thanks to the simplicity of the range – there will be just eight versions of the car, which will come fully specced. The firm is trying to simplify the whole process, from pricing to specification to ordering.

"Some cars have hundreds of millions of different combinations available," says Visser. It’s a difficult job to keep track of orders in factories, but the Lynk & Co distribution centers will have examples of each version ready to go. Production starts in the final quarter of 2019, with deliveries to begin in the first three months of 2020. The cars will be built at the Lynk & Co facility in Ghent in Belgium, and every one of them will be hybridized and automatic. 

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There’s another important factor in the Lynk & Co setup that Visser thinks will challenge the current status quo among carmakers: things going wrong. "The car industry generates its money from aftersales, but for us it’s the opposite – the more issues our cars have we make less money. It’s the right mindset because it drives you to make your cars really good."

With 18 months to go until the first cars arrive on U.K. shores, there’s a lot of work to be done to build up the Lynk & Co brand. Visser and his team are keen to build up something more than a carmaker and the Belgian isn’t afraid of the gap – in fact he says he thinks it’s brilliant. 

"We’re going to have spent two years launching this brand without a product," he says. "We want to be a lifestyle brand. It’s important that we do things that are relevant to young people – the problem is it gets too easily cliched. Trying to be cool is not cool, you’re walking on thin ice. If you push it it becomes fake."

The brand plan so far has included launching fashion ranges in Amsterdam and China, collaborating with furniture designers and the company is planning on going to hip festivals such as Tomorrowland in July. 

Lynk & Co’s unofficial motto is to do the unexpected – at the firm’s Gothenburg HQ there’s a ban on ties and people have to leave their mobiles in a blender before meetings can start. An elaborate marketing plan will see the firm pop up in all sorts of strange places. Perhaps the only place you won’t see them is at motor shows, says Visser – that would be too uncool. 

Behind the scenes of a luxury car dealership

It’s not about hard selling. Not any more.

Spend an hour or two with Ken Choo at London’s Bentley dealership Jack Barclay — flagship of the countrywide HR Owen network of 15 luxury car dealerships — and you’ll soon learn that the process that delivers prestige cars into the hands of new owners no longer involves old-style persuasion.

Neither do Choo and his team want it that way. They’re well aware that today’s luxury car buyers arrive with a pretty good idea of what they want (having usually done prior research online) and they have an even clearer view of how they want to be treated. Dealers are for helping them realise their dreams and emphatically not for coercing them into unwanted actions.

Behind the scenes of a luxury car dealership

“We won’t chase people,” says Choo. “Instead, we create events and opportunities they want to join. We had 500 guests at the recent Geneva motor show and they tell us they had a great time. This kind of thing gives us opportunities to know our customers and understand what they want. There’s a lot of trust and goodwill in this business nowadays, or should be. It’s founded on continuity, not one-time profits.”

Which begs a big question.

Choo has just spent big money refurbishing the famous Jack Barclay showroom, a London landmark for 86 years; if sales centres aren’t needed, what was the point of that? “It’s our window on the world,” explains Choo. “We use it to meet people, to understand and follow trends and, of course, to display our latest cars. We deliver cars from here, too, if that’s what buyers want. And because the place has such a history, many of them do.”

Choo, a quietly spoken 45-year-old Malaysian who trained in accountancy in Australia, had precious little knowledge of the luxury car game before he arrived in Berkeley Square at the beginning of last year but believes his fresh eyes have helped progress the business in new directions.

Behind the scenes of a luxury car dealership

A dozen years ago, his skill at finance caught the eye of the Malaysian billionaire Vincent Tan, best known for his eventful ownership of Cardiff City Football Club. Tan set Choo a series of ever more challenging jobs in his multi-faceted Berjaya Corporation before bringing him to the UK to manage and expand a Berjaya hotels group.

In 2014, Choo became general manager of Cardiff City, soon rising to the CEO position he holds now. Last year, he also assumed the role of CEO at the HR Owen group; no-one could say his roles and skills weren’t many and varied.

Tan and Berjaya have had a controlling interest in HR Owen since 2013 (Tan experienced a level of customer service that “could be better” while buying a Rolls-Royce, so he bought the company), but Choo’s mission was to improve things. “We were faced with an important decision about refurbishing Jack Barclay,” he explains.

Behind the scenes of a luxury car dealership

“First of all, I did some research to understand the history we needed to maintain. Then I needed to hear from the car companies and know their plans for the future, especially Bentley. We knew we needed to invest to find more customers, but that we needed to feel confident about the companies.”

The resulting refurbishment of the showroom went ahead (it opened officially in March) and the work has been done with a subtlety that equally pleases lovers of contemporary spaces and of timeless features such as the original metal doors, tile flooring, wooden wall panelling and even founder Jack Barclay’s original filing cabinets and boardroom table.

Nowadays, there’s a discreet door leading into the UK’s only Bugatti showroom next door, and a similarly close relationship with Rolls-Royce Motor Cars London on the other side. Under Choo, the Rolls dealership has just achieved a perfect score on every assessment point by the parent company: sales, service and everything in between.

Behind the scenes of a luxury car dealership

After little more than a year, Choo has developed close relationships with the luxury car companies — which know full well he commands one of the northern hemisphere’s most powerful luxury dealer groups and have recently learned of his ambitious plans to expand more.

He reckons Ferrari has the model line-up with the widest appeal, rates Aston Martin chief Andy Palmer as the “most innovative” from a marketing point of view and likes dealing with Rolls-Royce’s “very honourable” management (and has high hopes for the sales prospects of its forthcoming Cullinan SUV). He expects “good progress” from Bentley under its proven new boss Adrian Hallmark and he has been working hard on Lamborghini’s Stefano Domenicali to liberate larger supplies of the right-hand-drive Urus SUV.

In several areas, HR Owen boasts 30-40% new customers, and the average age of buyers is falling, too, although traditionalists remain an important buyer group.

Behind the scenes of a luxury car dealership

New models such as the Urus and Cullinan are bringing different customers into the luxury car business and the trend will continue, says Choo. “Understanding model plans and cycles, and getting good supplies of cars, are the subjects at the top of my agenda,” he explains.

“There’s a sizeable group of customers that only wants to deal with us,” he says, quietly stating facts, not boasting. “People see our numberplate as an asset. If we can’t get it from you, they say, then we don’t want it at all.”

Car chief is on the ball: how Choo balances cars and Cardiff City 

Ken Choo sees no conflict between the diverse businesses he leads as CEO: the HR Owen luxury car group and Cardiff City Football Club. In fact, he says the two activities can be quite helpful to one another. His policy of creating “experiences” for car customers had led to car owner groups attending games: “We had about a dozen HR Owen customers in the directors’ box when we played Manchester City in the FA Cup, and they had a great time.”

Even eating up the 150 busy road miles between London and Cardiff isn’t a problem; Choo’s usual choice is a Ferrari 812, while his wife prefers the latest Lusso. Despite the boss’s preferences, Choo notes a strong preference for Astons in the car park at Cardiff. “They’re very popular,” says Choo. “We practically have to block the entire first row of the directors’ car park to get them all in.”

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