Mobilization is a necessity in today’s modern world and nothing beats cars as the most comfortable, utile and accessible vehicles to move around. Although for longer distances there exist alternatives such as planes, ships and helicopters, in terms of in-city and countryside mobilization, cars are simply the greatest. Car business is also one of the most dominant and important sectors of the global industry today, with several different sub-categories of business operating under a single dome. There is the retail business which sells first and second hand cars, while there are also the spare parts/service and cash for cars businesses that offer assistance to car owners in terms of maintentance and sales of their vehicles. With the introduction of electric cars recently, the market began to make headlines once again with its new products, services and future promises, meaning that it is a good idea to keep a tab on what is going on in the auotomotive markets to be ready for exciting news and products as well as issues awaiting to be revealed to the public soon.
Donald Trump’s election as the 45th president of the United States has affected every aspect of life in the country and in the world, with the automobiles business being no exception. Ford has announced recently that, thanks to the Trump Administration’s recent tariffs on cars assembled in China, it will not be releasing the new Ford Focus Crossover into the American markets. The tariffs go up to 25% for such cars and the situation constitutes a risk for the company’s predictions of 50,000+ vehicles to be sold annually in the US. The American automobile market is heavily dependent on imports and no producer can compete in the game solely by domestic production, meaning that Trump’s economic plan will create further complications for other brands as well. In addition, as the tariffs will shrink the markets and reduce the consumers’ purchasing powers, US based production will also find it harder to sell cars in the country due to higher prices and lower consumer demand. The financial markets have already begun to respond to such a critical mistake in policy making as Ford’s stocks fell under the $10 benchmark for the first time in 10 years to $9.48, equating a 2.3% loss of value for the company.
The situation at the other end of the Atlantic seems to be no better as the UK based car producers and retailers are also worried about the prospects of business following the recently approved controversial bill ‘Brexit.’ Creating a socio-political environment of confusion and uncertainty, Brexit led the British public to cut down on expenditures on cars, creating a 5.7% drop in sales of automobiles in the country in 2017. The same ratio for 2018 is expected to be around 5.5%, showing no sign of improvement 1and signaling a long term recession for the industry. The UK economy enjoys a steady relationship with the rest of the globe regarding automobiles, selling 80% of the domestic production to foreign markets, meaning that the incapability to continue such commerce will have drastic effects on the country’s economy. The main point of concern is that trade barriers will be heightened following Brexit while America’s ongoing economic war with China will continue to have adverse effects on the European automobile businesses. Considering UK’s current intimate economic relations with China and its political associations with the US, the current state of crisis is prone to produce larger problems for the country’s economy in the years to come.
China’s great production power seems to pose yet another threat to Western capitalist economic dominance: serious competition in the newly emerging electric supercars market. Companies such as Tesla, Porsche, Mercedes-Benz and Lamborghini have all released promising vehciles into the market recently but China’s NextEV seems to have defeated them all with its new model, the NIO EP9. The car is capable of reaching 265 miles/hour speed while also being charged in as little as 45 minutes, both of which are features that are currently only dreamed of by the company’s competitors. Although the car costs $1.2 million per a single unit of production, China’s integrated economic system has enabled NextEV to partner with other industrial conglomerates to create extra funding for the project to continue research and production. Government owned companies such as Bejing Auto International Corporation are also helping NextEV reach global markets to help promote its cars and enhance its sales with sub-brands such as ArcFox to help establish a strong brand image in the eyes of the global consumers for the company.