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European Luxury and Auto Sectors Hit Hard by Chinese Market ...
2024-09-15 05:50:08
Automotive
China
Business

European Luxury and Auto Sectors Hit Hard by Chinese Market Shifts

European luxury and automotive industries are facing significant challenges, primarily due to changing dynamics in the Chinese market. Luxury firms have seen a $240 billion loss as affluent Chinese consumers turn away from high-priced goods.

Brands like Burberry, Kering, and LVMH are experiencing notable declines. The automotive sector is also struggling, with companies like BMW and Volkswagen reporting significant drops in stock prices.

The slow transition to electric vehicles and stiff competition from Chinese manufacturers are exacerbating these issues. Analysts remain divided on the future prospects, highlighting the complexity and volatility of the current market landscape.

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Volkswagen Faces Potential Strike Amid Job Security Concerns

Volkswagen is navigating a precarious crisis as its works council chairwoman, Daniela Cavallo, signals a looming strike. Employees are advocating for extended job security amidst collective bargaining negotiations set to commence on September 15. With the expiration of peace obligations at the end of November, warning strikes could emerge by December for the 120,000 VW workers. The discontinuation of subsidies has severely impacted sales, leading to production cuts and heightened anxiety among staff. Local leaders in Niedersachsen are adamant that plant closures are unacceptable, stressing the need for VW to present a clear plan for the future. Hannover's mayor, Belit Onay, has directly challenged VW’s leadership, calling for concrete strategies to address cost pressures while adapting to the evolving European automotive market. Concerns over VW's inconsistent approach to electric mobility and investment disparities between the US and Germany further fuel the urgency for resolution.

Volkswagen's Struggle in Transition to E-Mobility

Volkswagen faces significant challenges as it transitions to electric mobility. The company grapples with low factory utilization and high costs, prompting plans for stringent cost-saving measures. Mayor Belit Onay of Hannover has criticized VW's inconsistent approach and urges the company to develop robust strategies to handle cost pressures and adapt to market demands. The VW board has terminated employment guarantees, leading to job insecurity. Despite investing heavily in electric vehicle production, facilities remain underutilized. Locations like Wolfsburg, Emden, and Zwickau face uncertain futures, with potential job cuts looming. The state of Lower Saxony, holding significant voting rights, demands VW secure its plants and workforce.

Read 8 more recent news on this topic

The press radar on this topic:

EL PAÍS
15. September 2024 um 03:25

The European car hits the stock market due to China and CO₂, only a couple of values are saved

Politics
Economy
Finance
The automotive industry fell by 10% in the year, with declines of around 30% for BMW and Stellantis and Volkswagen at pandemic lows. European automakers have suffered a severe punishment this week on the stock market after the German company BMW announced problems with the brakes of its vehicles. The sudden collapse of the shares of the Bavarian giant has been another stone in the path: last week Volkswagen announced that it is studying the closure of plants in its own country for the first time..
Business - South China Morning Post
15. September 2024 um 05:07

European luxury shares suffer US$240 billion rout as Chinese forgo high-priced goods

Economy
Finance
Politics
Europe's luxury firms lose US$240 billion; Burberry, Kering, Hugo Boss plummet; China's rich shun high-priced goods; LVMH falls to second; pandemic, lockdowns spur spending slump; GAM UK investment manager comments on volatility; luxury firms once seen as Europe's answer to US tech giants.
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