Financial Times (October 25)
“A painful and protracted hangover from the financial crisis has slashed demand for cars in Europe, forcing mainstream manufacturers to close factories, lay off workers and fill their financial statements with red ink.” Despite these measures, however, the industry is still struggling with overcapacity, compelling many global automakers to subsidize European losses with sales elsewhere. Providing a glimmer of optimism for Europe, however, Ford “called the bottom of the disastrous market slump on Thursday, the first carmaker confident enough to turn tentative hopes into official profit guidance and draw a financial line under six years of falling sales.”
Tags: Automakers, Carmakers, Demand, Europe, Factories, Financial Crisis, Ford, Guidance, Losses, Manufacturers, Optimism, Overcapacity, Sales, Workers
Wall Street Journal (November 9)
Amidst concern over the ongoing diplomatic dispute between Japan and China, “a dose of realism is in order about what the China market does and doesn’t mean to Japanese automakers…. To the extent a Chinese boycott is further depressing Japanese auto sales, of course it will hurt the carmakers’ bottom lines in a significant way. But it turns out China is simply an important market, not a uniquely important market.”
Tags: Automakers, China, Diplomatic dispute, Japan, Market, Sales
The Economist (October 24)
There’s no end in sight to Europe’s “carmaking crisis.” Sales have fallen for 5 straight years in the EU. In September, year-on-year sales were down 11% across the EU, 18% in France, 26% in Italy and 37% in Spain. “Britain was the only significant market to enjoy a small rise.” With production capacity of 17 million cars a year, and current demand around 13 million units, “the overcapacity is glaring.”
Tags: Automakers, Cars, Crisis, EU, France, Italy, Overcapacity, Spain, UK
Bloomberg (October 10)
“Sony, Sharp and Panasonic now have a combined market capitalization of about $29 billion, compared with Sony’s peak valuation of about $120 billion in 1999. Apple Inc. (AAPL)’s market capitalization is $596 billion and Samsung’s is $175 billion.” Japan’s electronics makers seem to be following in the footsteps of Detroit’s automakers. They haven’t kept up with changing markets and are being left behind with higher costs and shrinking market share. “Having the most-advanced technology—once a key strength of Japanese manufacturers—matters less as consumers increasingly pay attention to content, apps and user-friendliness rather than hardware specifications.”
Economist (February 18, 2012)
Overcapacity is plaguing European automakers. EU sales have dropped four straight years and are expected to decrease again this year. A price war, with discounts of up to 30%, has resulted as car makers struggle to sell units. “As the firms’ bosses face up to the need for big capacity cuts, the politicians must resist back-seat driving.” Some factories will need to be closed and some production work shifted overseas.
Overcapacity is plaguing European automakers. EU sales have dropped four straight years and are expected to decrease this year. A price war, with discounts of up to 30%, has resulted as car makers struggle to sell units. “As the firms’ bosses face up to the need for big capacity cuts, the politicians must resist back-seat driving.”
Tags: Automakers, EU, Overcapacity, Politicians, Price war, Sales decline
Boston Globe (November 26)
Domestic car makers are balking over proposed fuel efficiency requirements designed to bring corporate average fuel economy (CAFE) standards up to 54.5 miles per gallon by 2025. The standards should be enacted. “Technology has caught up with every previous standard, allowing Americans to save fuel while still driving the largest vehicles in the world….The result will be a major step toward independence from foreign oil, with the least possible disturbance of American driving habits.”Domestic car makers are balking over proposed fuel efficiency requirements designed to bring corporate average fuel economy (CAFE) standards up to 54.5 miles per gallon by 2025. The standards should be enacted. “Technology has caught up with every previous standard, allowing Americans to save fuel while still driving the largest vehicles in the world….The result will be a major step toward independence from foreign oil, with the least possible disturbance of American driving habits.”
Tags: 2025, Automakers, CAFE, Efficiency, Oil, Technology, U.S.
Economist (January 13)
U.S. carmakers are bouncing back, but the Economist splashes cold water on the global outlook. Excess capacity will hamper profitability. “The car industry can produce 94m cars a year, against global demand of 64m. Unless that changes, it will never return to health.”
Tags: Automakers, Capacity, Demand
