Supplier of Mercedes-Benz Emblems Files for Bankruptcy
Honda and Nissan Discuss Merger
The cold wind of Kamageddon has also blown through the German premium brand Mercedes-Benz. Gerhardi, the supplier of the iconic three-pointed star emblem of Mercedes-Benz, has filed for bankruptcy.
Mercedes-Benz three-pointed star logo in front of the Sindelfingen plant in Germany Photo by Yonhap News
Kamageddon is a portmanteau of 'car' and 'Armageddon,' referring to the fierce competition in the automotive industry as it shifts from internal combustion engines to electric vehicles. As Chinese electric vehicle manufacturers aggressively launch low-price offensives, European and American brand vehicles are being pushed out of the global market. China now controls 60% of the global electric vehicle market.
On the 21st, Bloomberg reported that Germany's Gerhardi filed for bankruptcy last month due to rising costs and declining demand, leaving about 1,500 employees facing an uncertain future. That's not all. In October, Volkswagen, the backbone of the German economy, announced a super-intense restructuring plan that includes closing three factories in Germany and cutting wages by 10%. The collapse has begun not only at headquarters but also among small and medium-sized suppliers.
Founded in 1796, Gerhardi supplied the three-pointed star emblem attached to the front radiator grille of Mercedes-Benz. This grille allows air to pass through to cool the engine and coolant. However, in the electric vehicle era, where the engine has become a simple metal block, the grille that cools the engine has become useless.
Bloomberg evaluated, "As internal combustion vehicles decline and automakers reduce production to respond to the shift to electric vehicles, Gerhardi has become one of the hundreds of small and medium-sized European automotive suppliers facing a management crisis."
On the 20th, news also emerged that Honda and Nissan, ranked 7th and 8th in global sales respectively, are discussing a merger. To enhance competitiveness against China's rapidly dominating electric vehicle market, the competitors have joined forces. The merger plan involves establishing a holding company that controls both companies while continuing to operate under their respective brands. If these two companies, previously competitors ranked 7th and 8th globally, merge, they will surpass Hyundai Motor Group to become the world's 3rd largest automaker.
The dominant analysis is that China's offensive will become even stronger. U.S. consulting firm AlixPartners stated, "The automotive industry's inflection points over the past half-century were Japan's high productivity, the emergence of Korean automakers, and Tesla, but now the new inflection point is Chinese companies." They predict that by 2030, Chinese automakers' global market share will reach 33%, 12 percentage points higher than this year's forecasted 21%.
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