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The Shutters Could Come Down Across Europe

The Shutters Could Come Down Across Europe

Geoff Maxted
DriveWrite
September 12, 2013

Readers with longer memories (which is a nice way of saying older) will remember how the dark days of the 1970’s effectively ruined the motor industry in this country. That was, arguably, caused by years of outdated practices and industrial unrest. Now the European industry stands under the axe but this time it is being caused by global economic problems.

Herr Martin Winterkorn, boss at VW, has bleakly pointed out that no less than ten European auto factories need to be shut down to reduce excess capacity caused by the depressed market. He managed to keep a straight face as he also mentioned that mighty Volkswagen did not need to make cuts because of their strong performance in the growing markets of the world from East to West. In other words he is suggesting that other car manufacturers simply don’t have what it takes to beat the VW empire. It’s hard to disagree.

By the end of next year Ford, General Motors' Opel unit, PSA/Peugeot-Citroen and Volvo will between them have shut five vehicle manufacturing plants in western Europe. These are on top of earlier closures of an Opel factory in Antwerp, Belgium, and a Fiat plant in Termini Imerese, Italy. Not good.

The region needs to reduce capacity by three million units in the coming years to reach a sustainable utilization level because the market will remain flat; at least according to the experts. Right now, in a desperate bid to shift metal, there are some cracking deals for buyers. If capacity is reduced in the fullness of time then these halcyon days of cheaper cars could be a thing of the past.