Home Investments, trends and recommendations (Nov 2018)

GEAB 129

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Nov 2018

Investments, trends and recommendations (Nov 2018)

– European Automobile Industry – The long and winding road
– GM – LOL
– General Electric – Will it fail or not?
– Oil: Seesawing to its death
– Financial market: Ashes to ashes, junk to junk
– Investments – Where does the money go?

European Automobile Industry – The long and winding road

Convinced that the emissions scandal is now behind it, the German automobile industry is ready to restart. VW (Volkswagen), for instance, lined up 440,000 vehicles in October (compared to the 310,000 last August). But two markets are about to escape VW – and not the least important:

  • The US market is refocusing on its own brands: The elimination of tariffs on European vehicles does not appear on the agenda of the transatlantic negotiations; on the contrary, Juncker has just warned that the truce (quite relative) he had managed to negotiate with Trump this summer on import taxes could cease by the end of the year.[1] No doubt a compromise will be found, but a complete abolition of customs tariffs in this area, desired by the Europeans, will not happen.
  • The other market currently moving away from Europe is, of course, China, as it has just entered the exponentiation phase of its transition to electric cars; a transition that will benefit the young Chinese car industry first and foremost. The momentum is so great that, from 2019, the Chinese are putting in place a policy of reducing state aid to the acquisition of electric cars; aid which will be carried by the industry itself.[2] Let’s bet that the craze for Chinese electric vehicles in China will go hand in hand with a craze for Chinese vehicles full stop.

The German car industry, but more generally the European one, is not likely to emerge from its difficulties… unless it starts taxing imports of extra-European vehicles…

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