Urgent and concerted action needs to be taken to address the contentious issue of automotive over-capacity in Europe, but also in developing markets according to a study by KPMG.

Many European plants are operating a significantly lower level than their capacity as Europe's stubbornly persistent recession - particularly in France and Southern Mediterranean countries - shows no sign of abating.

The study - Global Trends in the Automotive Industry - was outlined by KPMG Espana at the recent European Automotive Congress in Bilbao organised by European Conference Management.

"We can see very clearly what is new is this study says excess capacity does not [only] have to do with developed countries," KPMG Espana partner, country coordinator automotive industry, Francisco Roger, told the Congress. "There is also excess capacity in China.

"It has to be addressed and unfortunately there is no global solution to the problem. In the US, they solved this very quickly and in Europe this has never been solved. At the end of the day, there is an obvious excess of capacity."

Roger highlighted the disparity of approach from Member States of the European Union, with no common solution proposed so far, although individual countries are proceeding apace through OEM plant closures.

To that end, sites such as PSA in Aulnay, France, Ford at Genk, Belgium and Opel at Bochum in Germany, will all be axed with the loss of thousands of direct jobs and potentially tens of thousands more in the supply chain.

KPMG's study also painted a gloomier picture for pure electric vehicles than that earlier outlined by Nissan Spain, with sales proving hard to come by.

"E-mobility gained a lot of importance three or four years ago," said Roger. "[But] electric vehicles are not providing the solution for environmental problems, which is what they are supposed to do.

"It [EVs] will be more in the long term than what was initially expected. It is not going to have deep penetration, nor are sales volumes going to be very high, at least in the short term."

The KPMG automotive specialist maintained manufacturers were putting current emphasis on squeezing ever-greater efficiencies out of existing powertrain options and offering hybrid and plug-in hybrid vehicles.

"Car manufacturers have seen for each Euro they invest in trying to reduce consumption in internal combustion engines, the return is much greater than if you develop battery-powered vehicles," said Roger.

"It is thought the most efficient internal combustion engines will be on the market in six or seven years. By 2020, ICEs will be far more fuel efficient."