Will layoffs/plant closures/production cuts affect the Chinese market for multinational car companies in winter?

Affected by the weak economy and slowing demand, China's auto industry has finally hit the brakes after more than two decades of strong growth. Auto sales in China fell 2.8 per cent year-on-year to 28.081 m vehicles in 2018, the first annual decline since 1990 and a bitter winter, according to the China Association of Automobile Manufacturers. In fact, not only the Chinese auto market, 2018, the global mainstream automobile market performance is slightly depressed. In Europe, for example, sales of new cars in 2018 fell 0.04% from a year earlier to 15,624,486 in the final months of last year, with sales in major markets such as the U.K., Germany and Italy declining to varying degrees. In the U.S., new car sales rose 0.6% last year to 17.3345 million units, which can only be described as "subpar." It is precisely because of this downturn, from the second half of last year, including Ford, General Motors, FCA and other mainstream car companies have put forward a "slimming down" plan, through layoffs, plant closures, production cuts and other measures to improve operational efficiency, to cope with the decline in demand in the car market. All of a sudden, the entire car market is covered with a thick haze, for a long time can not swing away... Former giants have "tighten their belts" to live this round of car companies "thin" tide, the earliest from the U. S. Big Three. First, Ford, which in September 2018 reported plans to expand its global presence across the globe because of declining diesel vehicle sales and weak car production, as well as uncertainty over Brexit The market undertakes internal restructuring to significantly reduce costs and improve the efficiency of equipment and product programs, thereby reducing the cost of products and raw materials. Ford's restructuring plan will concentrate on the European market, or 70,000 workers, according to forecasts that could eventually lead to 25,000 job losses. Immediately thereafter, GM joined the restructuring. On Nov. 26, local time, GM said it would slash payrolls by 2019 and could close up to five plants in North America, as well as two outside the region. Moreover, as part of its plan to restructure its global operations in 2019, GM plans to halt production of several models in response to the shrinking market for traditional petrol vehicles and shift more investment to electric and self-driving vehicles. The total number of job cuts at GM is estimated at about 15, 000, slightly less than at Ford. Once the restructuring is completed, it is expected to save the company about $6 billion by 2020, half of which will be achieved by the end of 2019. This is far from over, and a few days later the F.C.A. Issued the same layoff announcement. On Dec. 4, local time, the FCA told labor unions that it would restructure its Mirafiori plant in Turin to produce electric vehicles because it was not yet fully utilized. During the restructuring, 3,245 blue-collar and white-collar workers, including all assembly plant workers, will be temporarily laid off. Some 2,445 of these workers will be laid off on January 1, 2019, and more than 800 will be laid off by March 4, 2019, and layoffs will continue until 31 December 2019. With the entry of the FCA, a huge wave of layoffs began to spread around the world, and a number of well-known auto companies, including Volkswagen, Kia, Nissan and Honda, announced layoffs plans to cope with the market volatility. At the end of January this year, Volkswagen announced that it would lay off workers and reduce production shifts at the Bratislava plant in Slovakia, and that the reduced working hours in the process would be compensated by upgrading the technical capacity of the production line, with the ultimate goal of improving quality and efficiency. The move is part of VW's plan to increase efficiency by 30% by 2025, and the savings will be used to invest in more expensive electric vehicles and self-driving. Also at the end of January, Kia announced that it would lay off workers in Slovakia this year, despite the company's modest presence there. Kia said it would lay off 27 workers from February on the back of a 35 per cent drop in demand for diesel vehicles at its Zilina plant in northern Slovakia, the first time it has laid off workers since entering the market in 2006. Nissan, the Japanese giant, has also announced several layoffs since the end of last year. At the end of December, Nissan said it would cut about 1,000 jobs at two Mexican plants because of volatile and challenging market conditions. About a month later, Nissan USA announced plans to lay off up to 700 contractors at its Mississippi assembly plant as sales of trucks and Titan pickup trucks slowed to adjust local capacity for better fitness Responding to market demand and maintaining healthy inventory levels. Honda, on the other hand, is largely to blame for the layoffs. On Feb. 19, local time, Honda announced it was restructuring its global production network. As part of that restructuring, Honda plans to close its Swindon plant in 2021, just as the Civic cycle is ending and 3,500 workers at the plant could be at risk of losing their jobs; Honda's Turkish plant will also be closed. Honda will focus its investment on domestic markets in China, the United States and Japan following the closure of factories in the United Kingdom and Turkey. Honda intends to restructure its global manufacturing operations through the restructuring and focus on higher-yield regions to optimize operations at a time when the company is accelerating its drive to become electrically powered. From this, we can see that the current auto companies compete for "slimming", in fact, the reasons are nothing more than the following: regional market demand decline, overall sales performance is poor; The local factory capacity utilization is unreasonable, the overall operation efficiency is low; The rising cost of raw materials increases the cost pressure of auto enterprises … Under the multiple tests, auto enterprises can only through layoffs and restructuring, re-optimize the allocation of resources, reduce expenditures, improve efficiency, to achieve "the best talent, the best use of goods, the best ability of money". In addition, new technology trends, such as autonomous driving and electrification, are gaining momentum, requiring these giants to invest in nurturing the market ahead of time and shaping competitiveness. Autonomous driving, in particular, can not really large-scale production in a short period of time, car companies at this stage in which the huge investment is equivalent to "burning money", almost no return, but had to do . In this case, through restructuring to accelerate the elimination of backward business, and then "liberated" the resources to invest in the relevant new business, it is indeed a good way. The impact of Brexit cannot be ignored. It is noteworthy that the poor overall environment in the current car market is an important reason for the above-mentioned car companies to make layoffs. The impact of Brexit cannot be ignored either. A slew of car companies have also made plans to slim down since the end of last year based on Brexit, according to the Globe Automotive Collection. The PSA, for example, considered closing one or two of its jobs as early as November if demand for cars in the region fell as a result of Britain's exit from the EU. Diesel sales fell 6.83% last year to 2,367,147 vehicles, as a result of the drop in popularity and Brexit. Vauxhall, which owns the PSA, also took a hit to its business in the region last year, with sales of passenger vehicles in the U.K. Plummeting 9.14% to 177,298 in 2018, according to statistics. On January 10, 2019, Jaguar Land Rover also announced that it would lay off 4,500 employees to drive its strategic transformation amid declining diesel vehicle sales, uncertainty over Brexit and declining car sales in overseas markets. The layoffs are expected to focus on marketing, management and executive positions, with most of them coming from within the UK. Said Jaguar Land Rover In 2018, the company sold 592,700 vehicles, down 4.6% from 2017. To improve its long-term strategic operating efficiency, the company plans to cut spending by ￡ 2. 5bn over the next 18 months to improve cash flow and ensure that Jaguar Land Rover continues to invest heavily in automation, connectivity, motorisation and shareization for the longer term. Into February, a growing number of car companies began to "Brexit", adjust production plans in the region. The first was Nissan, which was revealed in early February to have scrapped plans to produce the X-Trail SUV at its Sunderland plant in northern England and switched to Japan (Kyushu Island). "While we have made this decision for commercial reasons, the continuing uncertainty about Britain's future relationship with the EU will not help companies like us plan for the future," said Gianluka Defiji, president of Nissan Europe. The implication is that it has something to do with Brexit. Nissan's sales in the uk last year were a bit too much to look at, at 102, 637 vehicles, down 32.10% from a year earlier. A few days later, it emerged that Ford was also stepping up preparations to move production out of the UK for reasons similar to those of Nissan and the uncertainty surrounding Brexit. Ford is said to be looking for locations outside the UK. Indeed, Ford did not do very well in the UK last year, where it sold 254,082 passenger cars, despite winning the top spot in 2018 , down 11.59% from 2017. Meanwhile, BMW is considering moving its Mini line out of the UK. On March 5th media reports that BMW would consider relocating production of its Mini models from its Oxford plant in southern England if Brexit were to be disrupted have been confirmed by the head of BMW's Mini brand. And as march 29th, britain's official exit from the european union, draws nearer, more car companies may choose to shrink investment, lay off workers, cut production or even close factories altogether. Although the impact of Brexit is still uncertain for companies, both good and bad, no one dares to take the risk given the current downturn in the UK car market. A survey from the Association of British Automobile Manufacturers and Dealers also showed that nearly a third of car companies have delayed or cancelled investment plans in the UK because of Brexit, and one in five have already suffered business losses as a result. More than half of auto companies are implementing contingency plans and 12.4 percent are moving overseas, the survey said. According to the latest statistics, due to "Brexit" uncertainty and other factors, in January this year, British car production fell to 120,600, the eighth consecutive monthly decline in British car production. Demand in both domestic and overseas markets fell, particularly overseas, leading to a 21.4 per cent drop in UK car exports to about 93,800 vehicles year-on-year. Automobile enterprises "slimming down" Team to meet the needs of the 2019 market environment and business development, but did not disclose how many employees will eventually not renew their contracts. Hyundai laid off workers in China and cut production for the same reason-sales in the country have fallen. According to official statistics of Hyundai Motor, the company's annual sales in China in 2018 increased slightly by 0.6% compared with the same period in 2017, slightly more than 790,000 vehicles. Although the company has outperformed the market, this slight increase is actually based on its relatively small sales base in China in 2017 and its price-for-volume market strategy in the latter part of the year, so it is not commendable. Hyundai Motor Corp. is considering cutting production and laying off workers at its Chinese factories because of the market situation, officials said. Hyundai Motor is currently reviewing optimization plans to improve the efficiency of plants and equipment; At the same time, the company has proposed voluntary retirement schemes for Chinese employees. But Hyundai has not disclosed the scale of the eventual cuts or layoffs. Hyundai Motor Corp. also forecasts that sales will not grow significantly in 2019, after a slow 2018, due to protectionist uncertainty and sluggish sales in the U.S. And China markets. By comparison, Nissan has been doing a remarkable job in China, and even at the end of last year there was news of a production cut. Nissan plans to shrink its production capacity in China by 30,000 vehicles in the coming months as auto sales in the country continue to fall, according to people familiar with the matter. It is reported that Nissan's production reduction involves three factories, including the production of Xiaoka And the Zhengzhou plant that manufactures the best-selling X-Trail and Qichen models. Some argue that Nissan's move may be aimed at easing inventory pressures. Nissan sold 1,563,986 new cars in China in 2018, up 2.9% from a year earlier, but far short of the 12.2% increase in 2017, according to Nissan China. Therefore, Nissan may want to adjust its production rhythm to better adapt to the low-speed growth of the Chinese market through this production reduction. From this point of view, in fact, not only in the overseas market, in the domestic multinational car enterprises are also facing greater pressure for development. And multinational car companies are still so difficult, under the cold winter independent brands and how to live, it is even more worrying … …