BobbyD wrote:odysseus2000 wrote:There are some very strange comments in this thread that do not match up with how I see the VW situation. So for clarity here is a précis of how I view VW.
VW, along with most heavily indebted legacy auto, is about to face an unprecedented level of competition from China. I expect this to play out as did the UK auto industry when Japan began to export motors here. i.e. the UK auto industry was destroyed. The Chinese invasion has been delayed by the shortage of batteries giving legacy auto an opportunity to prepare.
Of all legacy VW has made the most noise about how it will create an electric future, but this rhetoric has not been matched by deeds. VW have produced a range of Frankenstein cars like the eGolf, the first eTron and various others while at the same time rushing through a program to make ID3, ID4 and various others as well as Porsche making very expensive electric sports cars. There has been no attempt made to bolster the balance sheet by e.g. stopping the dividend.
For VW to have a chance of survival it has got to produce BEV that sell and become cult cars. A classic historical example was the Golf GTI the first of the hot hatches that destroyed the UK sports car industry.
Sure some folk like the ID3 and ID4 cars, but they are not cult and coveted as was the GTI. This is a problem for VW as they need to show their bankers that they can make cult BEV cars and that they deserve to be able to borrow more both for investment in new cars and to cover the extensive redundancy costs as they scale down their ICE operations.
As things are the ID3 & ID4 are failing as cult cars, being described as lacking memorable features, something that was never said about the Golf GTI. At the same time Tesla is out selling them 1.7 to 1 with no European factory and limited model Y,
VW find themselves in a pincer movement with Tesla hurting them from above average spec and the Chinese about to hurt them from below average spec.
The only way I can see for VW to escape is for them to launch some car that is ultra desired and which becomes the poster car for the BEV age as did the GTI for the hot hatch age. For now the market for the ID3 & ID4 looks to be falling off suggesting they have squandered their opportunity.
Regards,
There are indeed some very strange comments in this thread Ody.
There's obviously no point in reposting the explanations which have been explained in depth and detail on many occasions before so I'm going to leave at at this:odysseus2000 wrote:VW, along with most heavily indebted legacy auto, is about to face an unprecedented level of competition from China. I expect this to play out as did the UK auto industry when Japan began to export motors here. i.e. the UK auto industry was destroyed. The Chinese invasion has been delayed by the shortage of batteries giving legacy auto an opportunity to prepare.
VW run their own finance arm, in fact they own their own bank. They make money borrowing money and then lending it out at a higher interest rate. It's a good business. It makes much money.
VW manufacture and sell more cars in China than the second and third largest manufacturers combined, and that's without including Audi who are a top 10 Chinese brand in their own right.odysseus2000 wrote:As things are the ID3 & ID4 are failing as cult cars, being described as lacking memorable features, something that was never said about the Golf GTI.
VW aren't cultists, they are the orthodoxy.
As far as I can tell VW have substantial liabilities (note 25 to 2020 VW accounts):
https://twitter.com/0_ody/status/138931 ... 45440?s=20
The Chinese offensive hasn't begun yet, but it is aimed directly at VW bread and butter models and will hurt VW margins on their entire business line, both ICE and BEV as the new Chinese competitors are vertically integrated.
Everything you have said about VW financial strength was said by UK auto when the Japanese came, then it was their large book of hire purchase and they then noted how Europeans were different shapes to Japanese so would not fit into Japanese cars etc etc.
Regards,