Volkswagen-and-Renault-warn-of-market-slowdownVolkswagen, Europe’s number one car provider along with Renault have warned that there could be a huge market slowdown in ‘emerging markets’.

Jerome Stroll, the Head of Sales at Renault said times are difficult at the moment from newer emerging markets despite the news of a recovery from the European market. Mr Stroll mention this at the Geneva Motor Show.

The Ukraine crisis at the moment has done Volkswagen no favours. Martin Winterkorn, the company’s chief executive said “We’re a major trade partner of Russia and are looking at the Ukraine and Russia with concern,”

The instability in the Ukraine may mean no investment in the emerging markets such as the Ukraine, with investors going for a safer option such as gold and government bonds.  Analysts have warned that market currencies could be weakened. This could have the same effect as the Yen did to Toyota, with importing being more expensive and car imports being damaged as a result. Already some emerging markets have unfortunately seen a huge decline over the past year. Christian Klinger, the Sales Chief at Volkswagen said “Some countries have seen their currencies devalue by 20, 30 or 35%. That always has consequences… very strong consequences if one doesn’t produce locally.”

It’s not all doom and gloom however. Executives at other companies remain upbeat about various growth opportunities within the sector. This includes the recovery in the United States which still has a long way to go as well as China which continues to have a rising demand of vehicles. These are the key positive outlooks for the near term.

Ralf Speth, the Chief Executive of Jaguar Land Rover said “We have seen the levelling out in western Europe over the last year and the very first sign that it can become stronger now. We’re seeing the US recovering more, and we still see a very solid China”

 

Volkswagen’s electric future

In more positive news, Volkswagen have released details on their new electric car. Many intriguing plans on the future of electric cars for the company have been revealed at the Geneva Motor Show. Part of these plans include a new hybrid version of the Volkswagen Passat.

Research and development for company hit values of €10.2 Billion. Most of that went to “green technology” it was mentioned by Mr Winterkorn.

Among Volkswagen’s green range  are the Golf TDI Bluemotion as well as plug-in hybrids the Golf GTE and  the Audi A3 Sportback.