It will be a fight for survival that the car brands are throwing themselves into. In fact, it is already underway, and several will go bankrupt, believes the Volvo boss.
In a new interview, Volvo Cars' CEO Jim Rowan makes no secret of the fact that he believes several car brands will go bankrupt.
The market situation will simply cause more people to succumb, he tells Norwegian Motor .
The prediction comes in the wake of the EU's recent relaxation of emissions requirements for the automotive industry, a decision that has caused a stir in the industry.
And a decision that Rowan, who wants the internal combustion engine banned now, is frustrated by.
– Many car brands will go under. Those that succeed now will have the advantage of fewer competitors.
Volvo boss mocks others who could go bankrupt
He refers to the change in the EU's emissions requirements that were originally set in 2019. A change that, among other things, meant that car brands had to pay gigantic fines for not building a certain number of electric cars.
According to Rowan, there was a clear understanding that emissions limits would be tightened from 2025, but that car brands also had time to prepare for it.
– What they have done is unprecedented: In close cooperation with the car manufacturers' organization ACEA, the EU defined some rules in 2019 regarding tightening of emission limits from 2025.
– Everyone could understand or understood them.
– It gave everyone plenty of time to plan for a certain proportion of the cars we make to be electric – otherwise we will have to pay fines.
– "Okay, we understand!" Then we get to the first quarter of 2025 – and then the rules change!, says Jim Rowan.
The director of Volvo Cars himself believes that the brand – despite its modest size – managed to adapt to the new rules.
– Honestly, Volvo is a small company in this context. If we can change, others can too. But they chose not to do so, the director notes.
Jim Rowan shouldn't get off to a bad start, though. Even though Volvo has, among other things, ditched the diesel engine, the brand has had to admit that it can't just sell electric cars. Read more about it here.
And most recently, the Swedish-Chinese brand has had to realize that it cannot be done in Australia either, where it would otherwise only sell electric cars from 2026.
In addition to the frustration over the EU's changed course regarding the internal combustion engine, Rowan believes that the global automotive market faces a number of fundamental challenges.
He particularly highlights China's growing influence on the market.
– The simple fact is that the global new car market is no longer 100 million cars a year, it has shrunk to 85 million.
– Of these 85, China accounts for 25 to 30 million cars. 10 years ago they served a Chinese market that had no used car buyers, everything was new cars.
– Now they have a second-hand market, while Chinese manufacturers are experiencing strong growth. Five years ago, Chinese manufacturers captured 25 percent of the domestic market, now they are at 57, and soon it will be 75 percent, says the director.
However, he forgets to mention that Volvo itself is Chinese, and that the brand has been so since Geely Holding bought Volvo out of the hands of Ford in 2010.
