AutoBeta(AutoBeta.net)03/04 Report--

Due to the spread of the novel coronavirus epidemic, the global automobile industry has been seriously affected, so that the global auto market sales and profits will face a decline. In order to actively deal with the aftermath of the epidemic, major multinational car companies around the world have formulated new strategic plans, including Mercedes-Benz, BMW, Nissan and Toyota.

Looking at the domestic market in January this year, luxury brands Mercedes-Benz and BMW, which slightly outperformed Nissan and Toyota, showed no signs of decline, while Toyota China and Nissan China showed year-on-year declines of 1.2% and 11.8%, respectively, both better than the 20.4% decline in the domestic passenger car market in January this year. But sales in February and beyond are hard to predict, and the extent of the decline is bound to plummet. Faced with this environment, Daimler and BMW said they would develop a recovery plan, while Toyota and Nissan hope to reduce profits by cutting costs.

In response to the impact of the current epidemic, Ola Kaellenius, chief executive of Daimler, said at a Mercedes-Benz E-level press conference yesterday: "as the epidemic has had the greatest impact on China, in order to positively respond to the extension of the Spring Festival holiday in the region, Mercedes-Benz did suffer a certain decline in February, so we are working on a recovery plan."

Kang Linsong also mentioned: "it is not yet possible to judge the impact of the epidemic on global business, and business in other markets outside the Chinese market has not been greatly affected at this stage." So it is too early to predict the impact of novel coronavirus's outbreak on Daimler's overall sales.

In fact, Daimler has a plan for a sharp drop in profits amid a downturn in the global auto market. Since last year, Daimler has announced that it is seeking cost cuts through layoffs, car cuts and other plans. Earlier, it was revealed that the scope of layoffs had spread to Beijing Mercedes-Benz. According to the plan, Daimler cut 4 per cent of its jobs in China in the first and second half of this year, reaching 4439 people, including about 200 foreign experts from Beijing Mercedes-Benz.

Meanwhile, Oliver Chipze, CEO of BMW, said on a conference call on Tuesday: the Chinese market has been significantly affected by the epidemic, but it will stick to its full-year sales growth target. He said BMW's influence in the Chinese market would last until March, so it was too early to predict whether BMW would not be able to meet its global sales targets.

Despite the downturn in the global car market, BMW plans to further increase sales in 2020 to promote its "new first strategy". According to BMW, the global supply chain has not been affected by the epidemic and the supply of spare parts has been guaranteed in the next three weeks.

It is worth noting that according to previous foreign media reports, an employee within the BMW company was diagnosed with novel coronavirus, resulting in the immediate closure of BMW's R & D headquarters in Munich and quarantine of 150 employees. A BMW spokesman also confirmed the news and said that the R & D center office has been temporarily closed and will be disinfected, but will not affect the daily operation of the group.

As a result of the epidemic, Japan and South Korea became the first batch of overseas factories affected by the shortage of spare parts. Among them, Nissan has suffered supply chain shortages since February this year, resulting in the suspension of some production lines at factories in Kyushu, Japan. Recently, there are media reports that Nissan will temporarily suspend production at the Miyagawa-cho plant in Miyagawa-cho, Tochigi Prefecture, from March 3. If the impact of the epidemic continues, Nissan will also close production at factories in Malaysia, the United States, the United Kingdom, India, Mexico, Russia and Spain in the future. It means that the earlier "crisis" of Nissan has not been alleviated, and it has been affected by the global spread of the novel coronavirus epidemic, further increasing the difficulty of Nissan's recovery.

To this end, Nissan CEO Makoto Uchida recently said that if the company's financial situation still can not be improved in the future, then Nissan may carry out more in-depth cost-cutting plans.

"of course, the novel coronavirus epidemic will have an impact, so we need to look at our business while considering all these factors," said Mr Uchida. "all the possibilities need to be taken into account. we are also prepared to conduct a more detailed study of the current fixed costs."

In addition, Toyota is also making a large-scale adjustment for the company's resources and open source, including a number of senior personnel adjustments.

According to Toyota's plan, Kenta Kon, the former chief accounting officer, will be the next first CFO, and the current chief financial officer will continue to serve as chief risk officer. At the same time, Toyota said it would abolish the position of executive vice president (EVP) in order to streamline the company's structure, improve production systems and cut costs. Toyota currently has six EVP positions (the position was first introduced to the company in 1982). All personnel changes will take effect from April 1, according to a Toyota statement.

In the face of weak sales in the global auto market and accelerated transformation, Toyota also needs significant cost savings.

Toyota also raised its forecast for operating profit for the fiscal year ended march 31 by 4.2% as the yen weakened slightly and the company expects car sales to be higher than previously estimated. However, Toyota said in the report that the impact of the epidemic was not taken into account in the estimate because it was unable to assess the impact of COVID-19.

But Toyota said on Wednesday that current plant operations in Japan could be affected by supply chain problems. According to the latest data released by Toyota, car sales in China fell 70.2% in February 2020 compared with the same period last year.

It is worth mentioning that when Tang Wei, CEO of PSA Group, talked about the impact of the epidemic, he said that under the current epidemic, Peugeot Citroen's dependence on Chinese parts is very low, so the crisis is more leisurely to PSA, and believes that it is risky for the entire industry to rely too much on Asian supply chains.

China's car market has been suspended by government guidelines to prevent the spread of the virus, causing serious damage to entire Chinese car sales and production in the first quarter of this year, and disrupting the parts supply of some automakers. So no matter how big the car companies are in the Chinese market, it will have a certain impact. Even if some multinational car companies appear to be unaffected, they are actually "quietly" planning.

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