In the past month, sales data for the global automotive market have been released, and after a trough in 2022, the market has shown a positive side. The two record 2023 earnings reports disclosed by Stellantis Group and Hyundai Motor Group have attracted attention from the outside world. However, under the trend of de-globalization, the structural challenges presented by the market are endless, and the dazzling financial reports in front of us are "just beginning to bloom" or "short-lived"? (Wen Cao Weichao).
The dragon soars all over the world, and the performance is eye-catching
On February 15, the sixth day of the Lunar New Year in China, Stellantis Group announced its outstanding 2023 financial results, with net revenue up 6% year-on-year to 189.5 billion euros, net profit up 11% year-on-year to 18.6 billion euros, and industrial cash flow up 19% year-on-year to 12.9 billion euros, all three key financial indicators breaking records. In addition, Stellantis' US stock rose 665%, with a market capitalization of more than $80 billion hitting a record high.
Coincidentally, South Korea's Hyundai Motor Group released a record performance report 20 days ago that also attracted attention from the outside world. Hyundai and Kia Motors' full-year revenues each reached 1627 trillion won with 998 trillion won, up 14 percent year-on-year4% and 15%, and operating profit of 15 trillion won and 11., respectivelyA record high of 6 trillion won. Hyundai Motor Group also ranks among the top three in the world with annual sales of 7.3 million units, and squeezes into the top four positions in the highly competitive U.S. market. Toyota and Volkswagen, the eldest and second, are not far behind. On the news, Toyota Motor raised its fiscal year 2023 (20234-2024.3) Consolidated net profit is expected to reach 45 trillion yen, an increase of 84%; Volkswagen achieved annual sales of 9.24 million vehicles, an increase of 12%.
The frequent appearance of "dragons" undoubtedly demonstrates the resilience of the global auto market, which means that the recovery of consumption in the post-epidemic era has taken a successful step. Does the first appearance of flowers mean the arrival of a smooth road? Looking at the outlook and sales guidance for Stellantis Group and Hyundai Motor Group in 2024, it seems that it will not be so simple.
The finishing touches were added to the US market
In the face of headwinds such as high inflation, a nationwide auto worker strike, and many restrictions on chips, the U.S. market has shown resilience in 2023, selling 15.6 million vehicles, up 12% year-on-year, the largest increase in nearly 16 years, and pure electric products have also exceeded the million mark, reaching 1.18 million units. It is believed that this year, with the support of multiple expectations such as the Federal Reserve's interest rate cut, the repair of the first chain and the optimization of product structure, especially the expansion of electric vehicles, automobile consumption is expected to be further boosted.
Describing its growth in the report, Stellantis said its battery electric vehicle and low-emission vehicle businesses grew 21% and 27% year-on-year, respectively, with plug-in hybrid and low-emission models ranking first and second in the U.S. market, respectively. In order to enhance its competitiveness in pure electric products, it plans to launch 18 new pure electric products this year, showing the group's aggressive attitude. Careful people found that its ace Ram pickup truck in the U.S. market sold 440,000 units in 2023, still ranking among the top three best-selling trucks in the United States, but it fell by 5% year-on-year, far inferior to many strong competitors, which should be regarded as a wake-up call.
In contrast, Hyundai Motor Group directly attributed its record performance in 2023 to the recovery of the U.S. market, selling a record 1.65 million units, up 12% year-on-year, while electric vehicles increased by 60%, making it the second-largest seller of electric vehicles in the U.S. after Tesla.
The strong recovery of the U.S. market has injected confidence into the development of multinational automakers. But in emerging markets, the performance of traditional auto giants is different, just like the helplessness and loneliness mixed with the stellar earnings reports of Stellantis and Hyundai Motor Group.
Longyou Shoal, the key market folded
The Asian market is very important. In 2023, China's automobile production and sales will both exceed the 30 million mark, continuing to be the world's largest auto market, of which domestic sales of passenger cars will be 21.69 million units, a year-on-year increase of 56%。The performance of the Indian market was also impressive, with passenger cars breaking the 4 million round number mark for the first time, achieving 4.1 million units, a year-on-year increase of 82%, beating Japan to sit in the third place in the world.
Stellantis Group's performance in the Asian market has been less than satisfactory. According to its performance report, sales in China, India and the Asia-Pacific region were only 150,000 units, less than a fraction of the annual sales of 6.16 million units, and various operating figures declined to varying degrees, and the business was bleak. After a series of setbacks such as the disintegration of Changan PSA in 2019 and the bankruptcy and liquidation of GAC FCA in 2022, the only entity in China, Dongfeng Citroen Automobile, should have taken on the hope of Stellantis Group to revive the Chinese market, but the product strength of oil vehicles, which has been widely criticized by the market, has stagnated, and the slow pace of new energy vehicles still continues. With the help of data disclosed by Dongfeng Motor, it can be seen that the sales volume of the joint venture DPCA in 2023 will be 80,000 units, a year-on-year decrease of 358%, the outlook remains cloudy.
In contrast, Hyundai's performance in the Asian market is double-doubled. According to the data, Hyundai and Kia sold 550,000 and 250,000 units respectively in the Indian market in 2023, an increase of nearly 9% year-on-year, leading and other competitors. In the Chinese market, 24Sales of 70,000 units and 80,000 units (excluding exports) totaled 3270,000 units, a slight decline. Judging from the total volume of the Chinese market and its historical record in China, it is still in the dilemma of "bottoming out and marginalization", and the hard wound of the serious decline in brand appeal will take longer to resolve.
Weak performance in emerging markets, especially China, the world's largest single market, undoubtedly lays a hidden danger for their continued growth. For its 2024 outlook, Stellantis does not provide clear sales guidance, setting only two non-growth indicators: double-digit growth in adjusted operating profit and positive industrial cash flow. Hyundai Motor Group cautiously set its sales target for 2024 at 7.4 million units, up about 1. year-on-year4%。It can be seen that the complexity of the market is far more direct than the figures in the financial report.
Ryoma spirit, to deal with complex situations
The performance growth in 2023 is driven by the recovery of consumption, driven by factors such as improvement and inventory digestion, while experiencing structural challenges in different markets. For example, in the United States, high inflation, the first chain crisis, the general strike of workers and the most interference measures such as the IRA Act, etc., have greatly increased the uncertainty of this mature market, the United States Cox Company expects the growth of the American market this year to be less than 2%, and the China Passenger Federation expects the growth rate of China's passenger car market to slow down to 3%. Industry insiders have shown a cautious attitude towards the outlook for 2024.
For multinational automakers, an increasingly structured market is increasing their strategic burden and consuming more senior executives' energy. The situation in 2024 will be even more complicated.
First, the structural trend in the major markets continues. For example, the challenge of the Chinese market lies in the changing competitive landscape, with the market share of domestic brands rising by more than 50% and continuing to increase, and the willingness to participate in the international market is further enhanced. The U.S. market is at a cyclical high, and the electrification process is slightly tortuous, in addition to the negative impact of the policy swing in the first year. Clearly, a more complex market raises the risk of a company's strategy failing.
Second, the industrial transformation has been further deepened. Traditional giants have made clear the important task of strategic transformation of electrification and intelligence, but the speed of transformation is slow. Autonomous driving is expected to explode this year, and the digital reconstruction of the automotive industry will accelerate into the core area, and more and more giants will fall behind in this range until the arrival of the "Nokia moment".
And then there's the revolution in mobility solutions. More and more mobility solutions are enriching people's imagination and ready to replace the products of car manufacturers at any time. The commercialization of unmanned vehicles (robots) on the ground and low-altitude unmanned aerial vehicles has begun, and will appear more and more in our field of vision in 2024.
There are no treacherous clouds, and there are not necessarily ups and downs, and the spirit of Ryoma is indispensable to deal with complex situations.
Whether it is "flowers" or "epiphany", after the rapids bravely advance, it is the scenery along the way.