Car production in Europe is down 200,000 units so far in 2003, but that’s better than forecasted thanks to improving demand and healthy exports.
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Prospects for next year look even better as sales of the new Volkswagen Golf and Opel Astra ramp up and the outlook brightens at Fiat.
Inventories have been reduced and production and sales are now balanced, says JD Power-LMC analyst Arthur Maher.
Stocks rose in the first quarter of 2003 but inventories have dwindled by about 50,000 units in recent months.
A combination of new models and rising exports are expected to continue to provide support in 2004. Production is expected to rise by 0.5-1%, says Maher.
Even Fiat appears to have turned a corner with the introduction of the new Panda.
Fiat built 20,000 Pandas in October in Poland.
Maher sees plenty of reasons for optimism at Fiat. He expects about 200,000 units of the new Panda to be built in 2004 and the new Idea mini-MPV to also do well. What’s more, the slow-selling Punto will get a facelift early next summer.
Fiat’s alliance partner, General Motors, has been disappointed by the poor performance of the Vectra. Opel’s new plant at Rüsselsheim has already seen short-time working.
On the plus side for GM Europe are the Corsa and the Meriva. And the new Astra goes into production next January.
PSA’s much more solid performance can partly be attributed to its manufacturing strategy. PSA’s flexible plants are dedicated to specific platforms. Renewal times between models on the same platform are staggered, keeping volumes at a relatively stable level.
The next few months will likely see a further shift towards Citroen models, says Maher. The C2, C3 and Pluriel are selling well.
Volkswagen production is slightly down this year, but rose in October.
The company indicated that the Golf V had the best production ramp-up of any VW product for many years with a current production rate of 2,000 a day.
Full production will be 2,700 a day. Volkswagen plans to build 135,000 units this year and 600,000 in 2004.
Several other key new volume models in the pipeline will help the VW group, says Maher. They include next year’s replacement for the Seat Toledo and the all-new Seat Altea compact MPV.
The CR-V – two-thirds of which is exported – is keeping Honda’s UK plant alive. But the poor performance of the Nissan Primera means there is still a shadow over the state-of-the-art Sunderland plant which is increasingly dependent on the Micra.
