Automotive industry watchers expect the unexpected ‘during class’, as it were. The July-August period, however, is traditionally the automotive industry’s summer break; it’s the quiet time, when very little happens, announcements are kept to a minimum and the industry generally heads for the beach.
That’s what makes this mid-August week – and 11 August in particular – such an interesting one, with three headlines that came seemingly out of the blue.
That one day in August opened with the eagerly anticipated but nonetheless surprising confirmation from Jaguar Land Rover that its new car factory will be located at Nitra in Slovakia. The OEM appears to have chosen central Europe over some of the other earlier global locations that it had reportedly been considering, including Mexico and the US. The full manufacturing facility will build aluminium-intensive vehicles at a rate of up to 300,000 units per annum by the end of the next decade.
Who was to know that a quick search using a well-known search engine would reveal that BMW has a business mobility services subsidiary called Alphabet, and that BMW also owns the domain name alphabet.com – the very name that Google has chosen for its new holding company?
That news broke on the same day that Google unexpectedly announced a corporate restructure; the tech giant’s various divisions have been reorganised under a new holding company headed up by Larry Page, with Sergey Brin as President, and Sundar Pichai as Google’s new Chief Executive. On the face of it, there appeared to be little or nothing in this announcement of direct consequence to the automotive industry; who was to know that a quick search using a well-known search engine would reveal that BMW has a business mobility services subsidiary called Alphabet, and that BMW also owns the domain name alphabet.com – the very name (also used by countless other businesses) that Google has chosen for its new holding company? According to a statement on alphabet.com, “The possibility of any trademark infringement is currently under review.”
As if this were not enough for BMW and Google to contend with on one day, they found themselves looking closely at what impact another surprise announcement might have on their respective businesses, in the wake of the shock decision by China’s central bank to devalue the Yuan, by almost 2% against the US dollar.
Although not unexpected, the suddenness of the devaluation in the world’s largest single-country vehicle market looks to have taken many global companies by surprise
As analysts pore over the underlying reasons behind the devaluation, and look to understand what impact it will have, especially when combined with the country’s general economic slowdown, vehicle manufacturers, luxury goods makers and tech companies in particular have begun reacting to falling stocks in the hours after the news broke.
Although not unexpected, the suddenness of the devaluation in the world’s largest single-country vehicle market looks to have taken by surprise the many global companies which have become accustomed to, reliant on and at the mercy of China’s recent high levels of growth.
China’s government officials rarely reveal publicly what they are thinking, and while making headlines internationally, this move has something of a calculated, controlled air about it. Nonetheless, because of that ‘poker face’ approach, the devaluation – and its impact on the automotive industry – raises a whole host of questions, the answers to which will become clear in the weeks and months that follow the currency’s sharpest devaluation in the last 20 years.
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Martin Kahl is Editor, Automotive World
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