China and electric cars offer automakers hope after a dire 2020

China and electric cars offer automakers hope after a dire 2020

LONDON: Sales of luxury cars in China and electric drives in Europe were the two bright spots for European automakers in a 2020 blighted by the COVID-19 pandemic, company updates showed on Tuesday.

China's auto industry rebounded swiftly following its shutdown to tackle the COVID-19 outbreak, while in Europe manufacturers' battle to meet tough new emissions targets helped electric vehicles (EVs) move from the margins to the mainstream.

Volkswagen, the world's biggest carmaker, reported a drop in sales at its core VW brand of just over 15per cent against 2019.

While VW brand sales fell nearly 10per cent in China, Volkswagen's luxury Audi brand had its best-ever fourth quarter and full-year sales in China rose 5.4per cent.

The VW brand also saw global sales of fully-electric cars jump 197per cent from 2019 to 134,000, although that still only represented 2.5per cent of the total.

"2020 was a turning point for Volkswagen and marked a breakthrough in electric mobility," said Ralf Brandstatter, head of the VW brand.

Rival BMW saw sales rise 3.2per cent in the fourth quarter and ended 2020 down 8.4per cent. But the carmaker, which also owns the Mini and Rolls-Royce brands, said sales were up 7.4per cent in China, its best performance since entering that market in 1994.

Meanwhile, Daimler's Mercedes-Benz brand, which reported figures on Friday, remained the world's top-selling luxury carmaker for the fourth year running. While global sales fell 7.5per cent, the premium brand saw sales in China increase 11.7per cent, including a 22per cent jump in the fourth quarter.

ELECTRIC AVENUE

The race is now on to develop EVs to meet emissions targets and challenge market leader Tesla.

The major carmakers need to produce large numbers of EVs to achieve economies of scale and make them profitably, and 2020 gave some hope they may be on course to achieve that.

EVs were the only good news in an otherwise bleak 2020 for France's Renault, which underperformed the global and European car markets.

While Renault's group sales fell more than 21per cent, its EV sales in Europe leapt more than 101per cent. The company confirmed it had met its 2020 EU emissions targets, thus avoiding fines.

Renault's chief executive officer Luca de Meo will present a strategy update on Jan. 14 that sources say will focus on reviving some older best-selling models as EVs.

BMW said global EV sales rose 31.8per cent versus 2019 and accounted for 15per cent of sales in Europe, "meaning electromobility is also a significant growth driver for the company in absolute terms."

BMW also met its 2020 EU emissions targets.

The carmaker said that by 2023 it would almost double its line-up of electrified vehicles to 25 models, with more than half of them fully electric.

(Reporting by Nick Carey. Editing by Mark POtter)

Source: Reuters

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