Previously EkaLore has written about many changes in the global automobile market. Many governments seek the migration to low-emission and electric vehicles. The global stakes are high for employment, industrial structure, and technology exploitation. In this series EkaLore looks at a simple cue: invasions of existing traditional automobile manufacturers’ markets are “No Surprise”. The focus in this release are the unrecognized losses coming to traditional manufacturers in G7 markets.
An unrecognized loss in the G7 traditional markets comes from a combination of factors.
Demographics (aging baby boom populations not buying any more automobiles)
Long life of existing purchases (now greater than 12 years of average vehicle age in the USA market and increasing due to quality and finance costs)
Life and workstyle changes (global work-remote, hybrid work, and changes in recreational choices)
The combined effects on the markets are to:
lower the unit demand for vehicles,
lower the replacement rate for vehicles, and
lower the need for automotive transportation.
The effects on traditional manufacturers are to:
increase the need to support the service networks for ICE vehicles,
increase the overhead allocated to each vehicle produced/sold, and to
decrease their overall global sales of the most profitable vehicles.
These unrecognized losses will weigh on traditional manufacturers’ employment, financial strengths, investment capacity, and ability to persuade governments of their value.
In many countries early automotive manufacturers looked to their emerging manufacturing workforces as key buyers. Workers were enabled by their comparatively high manufacturing wages and needs to get to work. Transportation needs changed with automation, remote work/hybrid work, and needs for skilled labor. Unlike the past future needs see higher skill levels not easily solved by migrating low-skilled (or low educated) workers to center on new production plants. Total automotive workforce sizes have been dropping for decades and will continue to decrease as production changes.
Together these factors are NOT surprising. Together these mean the Alien Invasion of Chinese manufacturers is now a firm expectation. These factors mean the damages are also not a surprise. The damages span political, financial, and market expectations. The large scale effects can also be predicted from these damages on traditional manufacturers, their sponsors, and stakeholders.
In the next release a set of conclusions looking at the no surprise Alien Invasion
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