It takes a significant capital investment every time an automaker launches a new product or updates current models, causing a spending ripple effect throughout the global supply chain.
The automotive industry is a global web of companies producing tens of thousands of parts to assemble a new vehicle. It requires significant capital investment every time an automaker launches a new product or updates current models, causing a spending ripple effect throughout the global supply chain.and electric vehicles. Companies invested tens of billions of dollars into the technologies, most with little to no short- to midterm returns on their investments.
GM and Ford spend their market cap in 1.9 and 2.6 years, respectively. Only Volkswagen, at 1.8 years, was lower than GM among traditional automakers. Toyota was the best suited, at 14.4 years.Former Ford executive Joe Hinrichs brought up Marchionne's 2015 manifesto during an automotive conference this summer, condemning the industry for its capital waste.
The rise of Chinese automakers has been eating away at the profits of traditional automakers such as VW, GM and others that were once dominant players in China – the world's largest car market that has quickly moved from being a consumer of vehicles to exporter. Marchionne argued such partnerships were effective but not enough going forward. He said companies could save billions of dollars annually in capital by sharing costs involving commoditized parts such as transmissions, standardized safety equipment and advanced driver-assistance systems.
United States United States Latest News, United States United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Carscoop - 🏆 306. / 63 Read more »