After seeing how companies operated internally for the last couple of days, we got to see a birds eye view of the broader automotive market from a market analyst from Bloomberg Financial. One of the things he mentioned was that broad shift in the geopolitical landscape with trade wars, embargos, and tariffs affecting everyone involved. As an American I personally can say that even as an individual retail investor it is beyond difficult to make trades with the constantly changing environments and regulations. Whether it’s the market moving based on what’s going on on twitter and other people’s speculations, or actual changes in policy and global market shifts, managing investments and mitigating risk itself was something that I am not surprised the speaker touched on. He mentioned that the entire market was very vulnerable to tariffs specifically which I was not at all surprised to hear as during the BMW presentation prior to the factory tour, we learned how many parts and materials were outsourced to many different countries and how they have production sites all over the globe.
He also went into how the companies were adapting and changing to these volatile times. One of the things he mentioned is that companies were going through major structure shifts to keep up with the new policies and trends. He touched on the fact that it is becoming increasingly difficult for companies to keep up with not only new market trends and the adoption of EVs but how the political landscape is making their operation difficult and hurting their margins.
One of the things I was however surprised to hear is that companies were reducing vehicle complexity. With the trends being in favor of a still relatively new technology and environmental regulations cracking down on emissions, I was very surprised to hear that making vehicles less complex was even an option. It is possible that what he meant had more to do with the production process but even then I did not see that in the BMW tour nor the MAN and Audi tours.
Friday helped connect many of the experiences from the trip together. Earlier in the week, we focused mostly on the engineering, manufacturing, and technology behind these companies, but the Bloomberg discussion highlighted the larger economic pressures shaping the future of the automotive industry.