The COVID-19 pandemic and subsequent semiconductor scarcity heavily impacted the global auto market, which is showing signs of recovery. Toyota and Volkswagen have reaffirmed their leadership in this field by generating the highest revenues and selling vehicles through May 2023. According to statistics, Volkswagen Group had a total revenue of $348.6 billion while Toyota Motor had $311.9 billion.
Other mentions were Stellantis at $204.9 billion, Ford Motor at $177.5 billion, and General Motors at $174.9 billion.This was accompanied by other companies that also took firm positions such as Tesla and Nissan thus contributing to the overall turnaround of the market.Tesla produced over 94.7 billion dollars’ worth while Nissan made 87.7 billion dollars.
The Rise of Chinese Market
The automobile industry has been through a number of crises in recent decades including the financial crisis from 2008-2009 as well as more recently due to COVID-19 pandemic.Notably, during these periods most global markets witnessed a decline in vehicle sales with China being an exception.The country experienced growth when other markets went down hence solidifying its status as one of the major vehicles sales outlets globally.
Over time, Chinese car makers have become stronger severing ties with Asian and Western partners on whom they depended for so long.Their significance in the world’s automotive market grew making them key players in both vehicle manufacturing and supply chain.However, China did not pass through troubles unscathed in 2020.Hence there was global chip shortage that lasted across years like 2021 and 2022 resulting into decline of vehicle stock.In spite of it, there were positive signals of industry revival seen from 2023 onwards until now.
Recovery by Major Players
Toyota’s financial performance exemplifies recovery mode.Statista notes that Toyota’s net income fully recouped from FY20&21 slump attributed to Covid19.As per April 2022 to March 2023, this was the most profitable phase for Toyota although its operating income & margins were affected by supply chain hitches and escalating raw material prices.
Volkswagen also had a remarkable year in 2023.The company’s revenues of 322.3 billion euros put it among the wealthiest enterprises globally.Volkswagen Cars made a major contribution to this increase taking about 26.8% of VW Group’s total turnover in 2023.
Tesla’s Recalls Raise Concerns
Despite an ongoing recovery, Tesla has been facing its share of concern.Tesla subsequently recalled over nine thousand U.S. Model X SUVs so as to address complaints concerning insecure roof trim which might actually heighten the probability of fatal accidents.It is important to recognize that this recall is only one example since within just this year, Tesla has had millions of vehicle recalls.
The latest recall involved a cosmetic trim issue with suvs produced in 2016 while on the roof.These trims may weaken and separate over time according to U.S. National Highway Traffic Safety Administration (NHTSA) thus making them unsafe.
Tesla responded promptly to these concerns.It initiated an inquiry during 2020 and by November of such period; it released a voluntary recall.However, those repairs done at that time were considered inadequate.Tesla intends contacting all those clients who are affected before October 14th offering free checks as well as servicing from dealerships.
Up to now, Tesla has recalled 2.5 million cars this year alone, standing second only to Ford that recalled 3.6 million vehicles in the first half alone. From software bugs to hardware flaws, the company has been able to approach each problem proactively through measures put in place for such incidents.
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