Multinational Automobile Enterprises Suffered Large Losses In The First Half Of The Year: Investment In New Technology Research And Development Has Not Shrunk

In the first half of this year, the global automobile industry suffered a huge impact.

According to the financial data released by several multinational automobile groups, even though the Chinese market recovered in the second quarter, which eased the pressure of many automobile enterprises, it still failed to reverse the situation of large-scale losses in the whole industry. Volkswagen, Daimler, general motors, Renault, Nissan and many other mainstream multinational automobile groups still suffered losses in the second quarter, and many automobile enterprises said that the business situation in 2020 would be extremely severe.

At the same time, a number of car companies have taken measures to reduce the impact of the epidemic on cash flow, such as reducing costs, reducing R & D costs, and seeking government help. However, in the face of the development trend of the automobile industry, even if they are in short supply, the leading automobile enterprises still say that they will not reduce the research and development expenses on new technologies, so as to provide enterprises with sustainable competitiveness.

Large area of automobile enterprises lose money

In the first half of this year, Renault, with a loss of 7.4 billion euro, is the largest loss making car company among the global mainstream multinational automobile groups. Nissan, its most important alliance partner, also had a net loss of 285.6 billion yen (about $2.7 billion) from April to June this year.

"Affected by the new crown pneumonia epidemic, the global automobile market demand has dropped sharply, the daily sales volume has fallen seriously, and the factory operating rate has also declined significantly, so the business situation is very grim." "In terms of profitability and free cash flow, fiscal year 2020 will be a challenging year for Nissan," Nissan CEO Seiji Uchida said on July 28 at a performance presentation meeting in the first quarter of fiscal year 2020 (April June)

The Renault Nissan alliance is not only affected by the global epidemic of new crown pneumonia, automobile enterprises are generally facing the situation of sudden drop in income and substantial loss.

Although the Chinese market has achieved good recovery growth in the second quarter, the three major German automobile giants all showed different degrees of decline in the first half of the year, of which Volkswagen and Daimler suffered losses of more than 1 billion euro.

In the first half of this year, the sales revenue of Volkswagen Group reached 96.1 billion euro, a year-on-year decrease of 23.2%; the profit before interest and tax was - 1.4 billion euro, compared with 9.6 billion euro in the same period of last year. Among them, the special project expenditure of Volkswagen Group caused by "exhaust door" in the first half of the year was 700 million euro. In the first half of this year, Volkswagen group sold 3.8931 million vehicles worldwide, down 27.4% year on year.

In response to the crisis, the management of Volkswagen Group has revised its previously announced dividend plan for fy19, which is EUR 6.50 per common share and EUR 6.56 per preferred share, proposing a dividend of EUR 4.80 per common share and EUR 4.86 per preferred share.

Volkswagen Group expects that sales in 2020 will decline significantly compared with that in 2019. However, due to the current positive business trends and the introduction of a large number of attractive models, Volkswagen is cautiously optimistic about the outlook for the second half of the year.

In order to alleviate the pressure of public cash flow. However, its electric model will still be introduced according to its important plans.

Daimler's second quarter results showed global sales fell 34% to 541800 vehicles. As a result, the company's revenue fell significantly by 29% to 30.2 billion euro, with an EBIT of - 1.682 billion euro and a net loss of 1.906 billion euro.

In fact, as early as February this year, Daimler launched a series of cost reduction measures to ensure the company's competitiveness, the most important of which is to lay off 15000 people in order to save 1.4 billion euro of labor cost every year. But the reality is worse than previously expected. At the shareholders' meeting on July 9, Daimler announced that the number of layoffs had risen to 20000, and the cut in labor costs had risen to 2 billion euros.

Although the U.S. epidemic has not been effectively controlled and the daily number of new infections is still high, U.S. automobile manufacturers have resumed full speed production of cars and trucks in the second quarter. Ford and GM, the two major U.S. car companies, have taken different measures to reduce losses.

Ford's operating results in the second quarter were better than internal expectations, with a net profit of $1.1 billion. However, this was mainly due to the $3.5 billion gain from VW's investment in Argo AI, with an adjusted EBIT of $1.9 billion.

GM continued to cut costs in the second quarter through major austerity measures, including reduced advertising, delayed compensation and some employee vacations, but still failed to make up for the loss. In the second quarter of this year, the operating revenue of General Motors was 16.778 billion US dollars, a year-on-year decrease of 53.47%; the net profit attributable to ordinary shareholders was - 806 million US dollars, a year-on-year decrease of 133.85%.

According to the specific data released by the above companies, the business of multinational automobile groups in China in the second quarter has basically recovered to the level of the same period last year, and the Chinese market has become the main profit source of multinational automobile enterprises. It is worth noting that it is thanks to the hot sales of domestic model 3 that Tesla has been able to make profits for three consecutive quarters.

New coding technology still needed

For car companies, in order to cope with the crisis, in addition to effectively reducing costs, the more severe pressure comes from the fact that in order to maintain market competitiveness, they have to continue to invest in research and development, especially the huge amount of funds that must be invested for the next generation of electric vehicles and intelligent connected vehicles.

Although Toyota surpassed Volkswagen Group in global sales in the first half of this year, it was not optimistic about fiscal year 2021. Toyota expects its sales volume to drop to 8.9 million vehicles in fiscal year 2021 (from April 1, 2020 to March 31, 2021), which is the lowest level in nine years. Its revenue will drop by 19.8% year-on-year, and its operating profit will drop 80% to 500 billion yen.

Toyota plans to reduce the proportion of R & D in the next generation from 1.4 trillion yen, but the proportion of the company's total investment in the next generation will not be stable from 1.4 trillion yen.

On July 28, Toyota Motor Company announced that it plans to operate a new holding subsidiary, woven planet, from January next year, focusing on autonomous vehicles, new car computer operating systems and advanced map development. The company will manage Toyota's other two new companies, woven core and woven alpha. Among them, we focus on the new field of vehicle driving, such as woven and core.

The foundation of the above three companies is Toyota Research Institute advanced development (tri-ad), a new company established by Toyota in March 2018 to promote the technology research and development in the frontier development field of automatic driving technology. The purpose of establishing tri-ad was to realize the one-stop software development from research to development, and upgrade data processing technology.

James kuffner, previously chief executive of tri-ad, will continue to lead the three companies.

Toyota said one of the goals of the three new companies is to create a more agile "software first" development process for the automotive architecture. According to one of the company's new products, arene's new operating system.

"For many years, to be precise, we were hardware manufacturers and software needed to be purchased. However, the software system must be continuously improved and upgraded with the development of the industry. Once the software task is handed over to others, it means that the upgrade can only be realized by looking at others. We need to focus on software systems. " Toyota President Akio Toyoda said.

In fact, Toyota's old rival Volkswagen has already set up a special software development department and decided to build its own system VW. OS. In addition, Bosch, a German parts supplier, has said it will merge the global automotive software and electronics business into a new division.

Tesla has brought unprecedented impact to the traditional automobile industry. Tesla believes that the automotive industry has the potential to stay vigilant against radical innovation. In fact, Tesla brings OTA technology of smart phones to the automotive industry, which brings great convenience and unprecedented car experience to consumers.

The automobile industry has gradually changed from the original "mechanical defined vehicle" to "software defined vehicle". McKinsey forecasts that the automotive software and electrical and electronic components market is expected to grow at a CAGR of 7%, from $238 billion today to $469 billion in 2030.

Previously, Tesla CEO musk publicly announced that Tesla will "open the license for software, and provide powertrain and battery". In the eyes of the outside world, this is a measure that Tesla wants to have more say in the automobile industry from the bottom. However, in the view of the industry, as the core factor of the future auto industry competition, the traditional auto companies are not willing to give up their voice.

It is worth noting that many traditional car companies have admitted the gap between software and Tesla. "Tesla is two years ahead in computing and software architecture and autonomous driving." Said Marcus dusman, Audi's chief executive.

However, traditional car companies are struggling to catch up, even in the face of severe business challenges in 2020. Even if Toyota's new technology doesn't stop in the field of pneumonia.

?