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The differing fortunes of car makers in Europe were
on display at the Geneva Auto Show, with investment by Nissan and upbeat
forecasts from BMW and Volkswagen contrasting with a discounted cash
call from Peugeot to fund its tie-up with General Motors.
The European car industry seems to be reaching a tipping point, with a
grinding price war underway in a withering market, combined with high
overheads from excess manufacturing capacity.
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But the pain is not being shared out equally. Demand for luxury cars is
holding up better than the mass market and some automakers are proving
more successful than others in tapping stronger demand from north
America and emerging markets.
Japanese car maker Nissan Motor Co <7201.T> underscored its confidence
on the first media day of the show on Tuesday, saying it would invest
$200 million to build its new Invitation compact car from mid-2013 in
Sunderland, northeast England, where its workforce will rise by 600 to
6,000.
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Japan’s No.2 automaker said the move, which will be supported by a $15
million loan from Britain, would create a total of 2,000 jobs at Nissan
and its suppliers.
Meanwhile, Volkswagen AG <VOWG_p.DE> threw out a challenge to the
world’s largest car makers by volume, General Motors <GM.N> and Toyota
Motor Corp <7203.T>, as Chief Executive Martin Winterkorn said the
German company was confident of achieving its long-term target of
stealing the top spot after strong car deliveries at the start of the
year.
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And BMW <BMWG.DE> said it expected group sales to grow this year, after
a 14 percent year-on-year increase in February, with a young model range
and growth in China and India offsetting a sluggish Europe.
PSA Peugeot Citroen <PEUP.PA>, in contrast, highlighted the difficulties
facing European-focused mass market automakers, as it unveiled a
cut-price rights issue to fund the alliance with General Motors Co <GM.N>
it needs to help it accelerate growth in new markets and cut costs on
developing new models. [ID:nL5E8E60A3]
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Fiat <FIA.MI> Chief Executive Sergio Marchionne said
the alliance between Peugeot and GM created complications for players
like Fiat, but added he was open to all potential partnerships, even
that newly formed tie-up.
MANUFACTURING COMMITMENT
Nissan, which expects initially to produce about 100,000 a year of the
new Invitation model, already makes its Qashqai and Juke models in
Sunderland, the largest car factory in Britain, where it produces around
500,000 vehicles annually.
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The British government has been seeking to save automotive jobs as the
European sector braces for capacity cuts. The small car segment in
Europe, where competition is fierce and capacity bloated, is seen as the
prime target for cuts.
Volkswagen’s upmarket Audi business, meanwhile, expects to grow faster
than the 4 percent figure predicted for the global market, according to
sales chief Peter Schwarzenbauer.
“We believe we can do better than that,” Schwarzenbauer said. “Effects
from weakening markets in southern Europe should be well compensated
for.”
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Audi believes demand for luxury vehicles in China, where it is market
leader, will continue to expand in coming years. The Chinese luxury
market could more than double to 2.3 million cars by 2020 from 945,000
last year, Schwarzenbauer said.
Audi sold more than 200,000 vehicles in the first two months of the
year, a record for the company.
The Volkswagen group’s namesake VW brand saw record sales in the first
two months of the year, up 8 percent.
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GM’s Chevrolet Volt plug-in hybrid was named European Car of the Year in
Geneva, showing low-emission technology had won over the experts.
However, consumer approval is proving more elusive: earlier this month
the carmaker said it was halting production of the plug-in hybrid and
laying off 1,300 workers for five weeks this spring, to control stocks
of the vehicle in the face of disappointing demand.
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