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Carmakers uncertain over future market

GM is back making money in Europe but the market over the coming months is proving difficult to predict.

GM Europe boss Nick Reilly said: "The order take is up and we are not really seeing a lack of confidence but we are taking a much more cautious view of the market.

"There are a lot of uncertainties in Europe and in the US and that will only benefit the Asian carmakers. We are being careful on our production numbers, erring on being short on inventory."

Overcapacity in Europe remains a problem, he added "but that seems to be part of our industry. We have taken 20% out of our capacity in the past year which is painful but it has put us in better shape. However, not many have followed us and overcapacity continues to put downward pressure on prices."

Since restructuring, GM Europe has reached agreement at its factories in the region which allows it to take time out of production one year and add it later without affecting wages.

Alain Visser, vice-president of sales, marketing and aftersales, added: "The European market place is insecure. There is a lot going on which makes it difficult to forecast.

"The good news is Russia where the market is increasing but there are several issues in places like Greece, Portugal, Spain, Italy and even the UK. Looking at the macro economics in Germany, this shows that consumer confidence is waning and the UK is worrying. There are more risks than opportunities at the moment."

That has not stopped carmakers introducing new models at the Frankfurt Show, however. Visser added: "The worst thing you can do is wait for a recession to end. Our models plans were already well advanced when the economic environment changed. I remember being told in 2009 that the Insignia was the right car being launched at the wrong time, but it has done well for us.

"You need to remain aggressive in terms of new products and our plan is to grow our share even in a diminishing market."

 

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