Will the automotive industry rise again in 2020

Auto industry in focus: Daimler with billions in loss, Tesla with profit

"At the moment the classic automobile manufacturers who are attached to the internal combustion engine are doing relatively badly," says Frank Schwope, auto analyst at NordLB, describing the current situation in the international automobile industry. Now even higher investments would have to be made than were already due for entry into electromobility and autonomous driving, the expert said in an interview with DW.

However, Tesla, the electric car manufacturer, which can gradually increase sales figures and only had to accept slight losses in the context of the corona pandemic, is in a completely different position. "It just came about," says Schwope, "because the Tesla plant in Shanghai was able to ramp up production and thus support the company. That is why Tesla has posted black quarterly figures for the fourth time in a row."

Tesla could move up in the US benchmark index S&P 500

The longest stretch of profitability to date in its 17-year company history could now pave the way for Musk's company to climb into the US benchmark index S&P 500. A decisive prerequisite for being accepted into the circle of the largest listed US corporations are four quarters with black numbers in a row.

Right now on top: Tesla boss Elon Musk

The bottom line was a surplus of 104 million dollars (90 million euros) in the three months to the end of June, as the group of tech billionaire Elon Musk announced on Wednesday after the US stock market closed in Palo Alto. In the previous year there was still a high loss.

Despite the uncertain situation in view of the renewed corona escalation in the USA, Tesla is sticking to its ambitious goal of delivering over 500,000 cars in 2020. The capacity is available, but it is difficult to foresee whether there will be further production disruptions. The annual forecast can therefore be adjusted if necessary.

Second US factory planned

In a video conference after the balance sheet presentation, Musk also confirmed that Tesla's second US car factory will be built next to the main plant in Fremont, Texas, near the city of Austin. "We're going to build a stunning factory right on the Colorado River," announced Musk. The construction of Tesla's first European plant in Grünheide near Berlin is also progressing very well.

Incidentally, the new quarterly profit was also a milestone in other respects: For the first time since it was founded in 2003, Tesla was in the black for twelve months. In view of production downtimes and sales losses in the Corona crisis, this is a particularly great success, even if revenues fell by around five percent year-on-year to six billion dollars.

Losses at Daimler

In contrast, the German flagship car company Daimler drove deep into the red in the past quarter. The bottom line was the minus 1.9 billion euros, as the carmaker from Stuttgart announced on Thursday. Sales collapsed from April to June compared to the same quarter of the previous year by 29 percent to 30.2 billion euros. "Due to the unprecedented COVID-19 pandemic, we had to get through a challenging quarter," said Daimler boss Ola Källenius. But there are now the first signs of a recovery, especially for Mercedes-Benz cars. Provided that there is no second wave of infections that would stop the economic recovery, the Dax Group expects a positive operating result for the year as a whole.

Ola Källenius, Chairman of the Board of Management of Daimler, launched one savings program after the other

The pandemic forced carmakers to halt production for weeks. The car dealerships were temporarily closed. Consumer demand collapsed in the face of financial uncertainty and public restrictions.

Problems of classic car manufacturers

Daimler's losses reflect the problems of almost all classic car manufacturers. In order to cope with the difficulties, the corporations would have to cooperate more closely, perhaps even enter into alliances or mergers, says the auto expert Frank Schwope, "quite simply to cut costs". The planned merger of PSA and Fiat / Chrysler, probably by the beginning of next year at the latest, is a good example.

Schwope believes that there are even three possible partners for Daimler. First of all, there is BMW with a similarly elegant premium image. But it is also conceivable that Daimler will move closer together with Renault and Nissan. Mutual shareholdings already exist with both groups. The situation is similar with Volvo / Geely, the third possible partner. Geely, the Chinese owner of Volvo, holds almost ten percent of Daimler's shares. However, Källenius called such considerations "completely wrong".

Strong together

Strong together - this leitmotif could also apply to industry giants such as Toyota and VW. Volkswagen includes different brands such as Audi, Seat, Skoda and a few others. The group is already a joint venture.

Toyota has tied Mazda, Suzuki and Subaru more closely to itself over the past few years and sold more than 16 million vehicles with these partners in the past year.

Chassis of an ID 3 electric car from Volkswagen

VW and Ford

At VW there were around eleven million vehicles. At VW, an even closer cooperation with Ford is conceivable. There are already joint development activities. The new pick-up from Volkswagen will be developed and produced by Ford. The electric platforms from Volkswagen would also be used by Ford.

Competitive pressure for Tesla will grow

So in the future only partnerships in the automotive industry - only at the top is Tesla marching alone?

At the moment it looks like it, says Schwope. But at some point, maybe Tesla will also get a bit of a mess. The market for their vehicles is probably not infinitely large. "At some point the group has to go into the lowlands of smaller vehicles, where less money can be made," says Schwope.

In addition, the Americans are currently still relatively unrivaled in the field of electromobility. The established manufacturers don't really have much to offer. "But that can turn around in the next two or three years. And then Tesla can come under significantly more pressure."