If you’re into cars or know anything about the car industry, you probably have a good idea that the industry is struggling right now. Car plants are closing, and people are losing work because the demand just isn’t the same as it once was. But what is the reason for this? People are still using cars and there are still traffic jams, so of course it’s not like cars are going extinct. Read on to find a few reasons on why the car industry is having trouble:
Falling Demand In China
Although you still may have gotten stuck in a traffic jam this morning, demand is still falling. There has been a slump in demand in China especially, which as you probably know is the world’s biggest car market. With falling demand somewhere as big as China, it goes without saying that the industry is going to struggle somewhat.
People Are Worried About The Emissions
Emissions never used to be given a second thought, but now it’s something many people are concerned about. Air quality concerns mean diesel sales have dropped. Plus, it’s worth noting that the introduction of tough new CO2 emission standards, designed to tackle global warming, make it much more expensive to build cars. Because of this, consumers are less likely to buy.
3. Electric Vehicles Are Becoming More Important
There are numerous obstacles getting in the way of carmakers selling electric vehicles. Many carmakers are not prepared to provide these vehicles in the right quantities. They need to be prepared to invest so they can aim their campaign at a wider market and change their operations entirely, but many are unwilling to do this.
4. People Aren’t Too Bothered About Ownership Anymore
While it used to be the case that people wanted to own their own vehicles outright rather than lease, this no longer seems to be the case. In fact, new technology could also play a part in this. Driverless cars are said to be on the road sooner than we think, and this means people may choose to share or rent instead of buy. Traditional car companies are seriously having to fight so that they can stay relevant. While owning a car means doing what you like with your vehicle, from taking it to be painted to paying a car window tinting shop to give you more privacy, leasing is becoming more and more attractive to people who want new cars regularly.
5. Brexit Is Making Things More Difficult
Nobody wanted a no deal Brexit, but it looks like this is what we are going to get. investment in the UK car industry has fallen in the last two years, slumping 46.5% in 2017 alone. We rely heavily on components imported from the EU, and many cars that are completed are then imported to the European mainland. The delays that are sure to follow will make UK plants less economic.
Were you aware that the car industry was having this much trouble? Leave your thoughts in the comments below!