Three challenges for automotive sector coming from China
|On the radar
-
Inflation in Croatia was published yesterday at 2.8% y/y (0.4% m/m).
-
Today, the Hungarian National Bank holds its rate setting meeting.
-
There are no other releases today.
Economic developments
It is well-known that Europe is gradually losing its dominance in car manufacturing. In our latest special report, “Prospects for the Automotive Industry in the EU and CEE”, we go deeper into the underlying reasons and the challenges arising from this trend. As of 2023, seven of the world's fifteen largest car manufacturing countries were still European. Additionally, Slovakia and Czechia hold the top two positions globally in terms of cars produced per capita. However, China has rapidly expanded its production capacities, increasing the number of cars produced by 68% since 2012. In the report, we identify three primary challenges that China presents to European car manufacturers. Firstly, European brands must enhance their competitiveness in the Chinese market, as they have been significantly losing market share in recent years. Secondly, China leads the EV market, necessitating substantial efforts for Europe to catch up. Lastly, China is significantly boosting its export capacity, with 16% of its cars being exported, making it already one of the largest global exporters. There are several ways how Europe can face these issues, some of which are also discussed in the Special report.
Market developments
On Monday, Mihály Varga has spoken as the nominee for the next governor of the central bank. He introduced his future colleagues: State Secretary of the Ministry of Finance, Benő Péter Banai, CEO of the Hungarian Development Bank (MFB) Levente Sipos-Tompa and Head of the Government Debt Management Agency (ÁKK) Zoltán Kurali. We see these nominations positively, as all three nominees are experienced professionals. On the market, yields in Hungary, Poland and Czechia went slightly up on Monday, while in Romania they decreased. The FX market was relatively calm yesterday, without major movements.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.