The big question in the financial markets will be the market reactions on Monday. What have we heard so far? The first thing is that trade wars are real at the moment and the markets are waiting for more information from the meeting in Helsinki on Monday. Will the US president Donald Trump or Russian president Vladimir Putin say something regarding the trade wars, economics or sanctions? Last week the markets closed mixed globally.
The trade wars are affecting primarily auto, steel and aluminum industries globally. So far the auto industries have developed very differently. For example the Swedish car manufacturer´s Volvo stock price (VOLVB) has increased by nearly 2 % annually, but for example the luxury car manufactuer Ferrari (Ferrari) by over 50 % in New York, On the other hand Tesla´s (TSLA) stock price has declined by over 2,5 % and the German company Daimler´s (DAI) by over 6 % and Volkswagen´s (VOW) with 0,5 % during the same period.
The autoindustry is important to the EU, while the German auto production is about 20 % of the global passanger car production. The turnover is about 404 billion euros according to the German Trade & Invest. And the industry sector is having otherwise very good future outlook with energy efficient cars, growth estimates are nearly 30 procent annually by 2020.
In the US, the autoindustry has seen signs of declining sales during the summer time – General Motors and Ford have been reporting. The city of Detroit is facing lay offs.
Last year totally 17 million passanger cars were built in the EU and EU was the second largest producer of passanger cars. The US production declined by 11,5 percent and the production totalled 8 million cars. China maintained its leading position among global passanger car producers – totally 29 percent of all cars were produced in China according to ACEA.
So, one can understand that Tesla decided to build a new car plant in China. The company announced last week that they will open a plant in Shanghai delivering 500 000 vehicles a year. The project time for the plant is about five years, but the size of the investment was not published.
The autoindustry is having big changes and for example the OEM production is also one part of it. So far, the EU has been the place for premium cars, but for how long? Also the UK Brexit-talks will have their own impact on the autoindustry development,