In remarks reported by Automotive News Europe (ANE), PSA chairman Jean-Martin Folz has voiced concern over the possible effects of the Iraq crisis on the European car market.
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Folz said the auto industry could be looking at a problem similar in proportion to the oil crisis of the 1970s, in a worst-case scenario.
“It is something of an unknown and like everyone else we are expecting the market to be flat or down by around 2 percent in 2003,” Folz told ANE. “But if the problem in the Gulf escalates there could be very serious repercussions in Europe.”
Uncertainty among buyers and a shortage of oil could drive the market down dramatically, Folz added. Folz said PSA was better positioned than most carmakers to ride the storm because of its high rate of capacity utilisation.
“Our plants are running on average at 117 percent of capacity which means we can reduce our manufacturing output without increasing the prices of our products,” Folz told ANE.
