Blog: Dave LeggettEurope's car sales slump – how long?

Dave Leggett | 28 September 2012

The Paris Show this year coincides with a decidedly downbeat tone being struck by some European car industry execs. We've got a still declining car market in Europe (off 25% since 2007), austerity budgets of varying strength everywhere, endemic discounting and overcapacity. To cap it all, the difficult political problems with the eurozone have just re-emerged (after a slightly brighter interlude). It's not the best backdrop for any OEM in Europe. For PSA, it's also a bit of a mare at home. Shutting Aulnay won't be a walk in the park and the French government recently commissioned a report which has thoroughly lambasted the strategic running of the company.

Still, economic slumps come to an end and eventually we get back to growth. The big question is: when? Conversations I have had about 2013 have been cautious, but the prevailing view seems to be that Europe will be flat next year, given the economic situation. PSA CEO Philippe Varin has been giving a pretty bleak view in Paris. Maybe he's not likely to be upbeat given the above, but he's been saying that his company is planning for flat for the next three years: '2015 not going to look very different to 2012'. Crikey. A prudent basis for corporate planning, certainly. Let's hope there's some sort of upturn in Europe by then. Much hinges on the path of the eurozone/financial/economic situation. It's still the unpredictable elephant in the room that is dragging Europe's economy down. I really do not want to be saying that this time next year.


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