Driving ahead in the face of falling sales, carmakers are unveiling over 100 new models at the Paris auto show.
The European market is the world’s most competitive and its worst-performing and even German manufacturers – previously apparently crisis-proof – are no longer immune with Volkswagen warning of “significantly more difficult” business conditions.
Paul Ingrassia, who has written several books on the car industry, said this is serious: “The industry is very sick. Usually at a car show, the cars are the story. This year the economy is the story. There is a lot of over capacity in the middle part of the market. So companies such as Renault, Opel, and especially Peugeot-Citroen and Fiat, they are all have too many cars, too few buyers, especially because of the economic recession that seems to be setting in in Europe.”
Sales in Europe were down 7.1 percent in the first eight months of this year from the same period last year.
Fiat suffered a 17.1 percent drop, Renault 16.3 percent and Peugeot-Citroen 13.5 percent.
Overcapacity is a huge problem and Fiat’s boss Sergio Marchionne, who also heads the European industry lobby group ACEA, wants a regional agreement on plant closures. For the moment that call seems not to have been heeded as carmakers hang on and hope the rebound will come sooner rather than later.