On December 24, Financial Associated Press reported (Reporter Liu Yang) that layoffs, salary reductions, and factory closures are occurring... under the pressure of weak Consumer demand and the transition to electrification, the Global Auto Industry in 2024 is facing an unprecedented storm. According to incomplete statistics from reporters, nearly 10 companies in the global Auto Industry have experienced layoffs or made corresponding decisions in the months leading up to the end of the year, with a total number of layoffs exceeding 0.05 million.

On December 23, Honda Motor and Nissan Motor jointly announced that they have signed a memorandum of understanding regarding the merger, officially starting merger negotiations. It is reported that they will establish a holding company with joint investment, and both parties will operate as subsidiaries of this holding company for the merger. According to the plan, the final agreement is expected to be reached by June 2025.

"The Trade aims to allow both parties to share intelligence and resources, achieve economies of scale and synergies, while protecting both brands," said Honda's CEO Mibe Toshihiro, indicating that the business integration will bring advantages that are impossible to achieve under the current cooperation framework.

One of the reasons Honda and Nissan made the decision to merge is the reality of declining performance that both parties face. The semi-annual report for fiscal year 2024 shows that Nissan's net income during that period was only 19.2 billion yen, a 94% year-on-year decrease. As a result, Nissan decided in November to lay off 9,000 employees and plans to reduce global production capacity by one-fifth. Nissan President Makoto Uchida stated, "The market environment is extremely harsh, and our core model sales have not met expectations."

Unlike the actions taken by the two major Japanese brands to achieve cost reduction through merger for synergy, the Volkswagen Group is attempting to achieve this goal through "internal slimming."

On December 21 local time, Volkswagen issued a statement that from now until 2030, the company will "reduce more than 0.035 million employees at its German factories in a socially acceptable manner," accounting for 29% of its total workforce, and will reduce production capacity in Germany while avoiding factory closures.

"Through this round of layoffs, the company is expected to save 1.5 billion euros in labor costs annually by 2030," Volkswagen stated, adding that according to the collective wage agreement, group employees' wages will not increase in the next four years, and some bonuses will also be canceled or reduced, while production capacity at several of Volkswagen's 10 German factories will be cut, with a capacity reduction exceeding 0.7 million vehicles.

Data released by the European Automobile Manufacturers Association (ACEA) shows that due to a significant decline in car sales in France and Italy, as well as stagnation in car sales in Germany, the number of new vehicle registrations in the EU, European Free Trade Association (EFTA), and the United Kingdom decreased by 2% year-on-year in November, to approximately 1.06 million units. In the EU market, sales of battery electric vehicles (BEVs) fell by 9.5% in November, primarily due to declines in the French and German markets.

Analysts in the German automotive industry predict that if European traditional automakers cannot quickly adapt to changes in Emerging Markets and policies, their market share may be further eroded. Over the next five years, the European automotive industry may need to cut over 100,000 jobs. 'This is not just an issue of corporate profitability, but also the growing pains of an entire industry undergoing transformation and upgrade.'

The plight of Volkswagen is a microcosm of the significant transformation pains facing the entire European automotive industry. At the beginning of November, Audi announced the elimination of 15% of non-production positions, resulting in around 4,500 job losses in Germany alone. Previously, Audi had announced plans to close a factory in Brussels and cut 3,000 jobs. Subsequently, Ford Motor announced plans to lay off 4,000 employees in Europe by the end of 2027, most of whom are based in Germany.

In addition, Stellantis, the world's fourth-largest automotive group, previously announced that starting January 5, 2025, the Toledo plant in Spain will change from a two-shift system to a one-shift system, putting 1,100 employees in uncertain positions. General Motors announced a plan to lay off over 1,000 employees globally in August this year.

It's not just the main manufacturers; the crisis is also spreading through the supply chain. In November, Germany's Bosch, the world's largest auto parts company, announced a new round of layoffs, planning to cut 5,500 jobs in its software, electronic components, and steering systems divisions, with more than half of the layoffs occurring in Germany. This is the third layoff plan from this German auto parts company this year, having already laid off 4,700 workers in January and February. ZF, ranked second globally, plans to cut 11,000 to 14,000 jobs worldwide by 2028; Continental, ranked eighth globally, will lay off 7,150 workers globally, including about 3,000 in Europe; while Faurecia, ranked ninth globally, stated it will cut over 10,000 jobs in Europe by 2028, which represents 13% of its total workforce.

The wave of layoffs in the automotive industry is not merely a reflection of individual companies facing difficulties, but rather an inevitable outcome of the global automotive industry undergoing structural transformation. Industry insiders believe that on one hand, the continued contraction of the traditional RBOB Gasoline vehicle market exacerbates corporate profitability pressure; on the other hand, while the transition to electric vehicles is seen as the future direction, the high R&D investment and intense market competition make it difficult for many companies to achieve profitability rapidly. At the same time, global supply chain issues and fluctuations in raw material prices keep costs high for automakers. 'The dual pressures of electrification and smart technology force automakers and component manufacturers to undertake structural adjustments, with layoffs becoming a direct means to reduce costs and improve competitiveness. 2024 may just be the beginning, and future industry restructuring will be even more intense.'