Renault Captur - chasing the urban fashion market
CRISIS MANAGEMENT With the financial crisis soon to enter its fifth year, the mainstream automotive industry is well accustomed to unremittingly bad news. Manufacturers are increasingly pinning their hopes on fashionable new niche models. Tony Lewin reports.
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umping sales, disappearing margins, programmes put on hold or cancelled, workforces put on short time – all have become part of the automotive industry’s everyday vocabulary. But it is only in the past year or so that the elastic has actually begun to snap in a more abrupt way: all the levers for fine-tuning have been pushed as far as they can go, the inevitable can be delayed no further and the taboo of closing whole factories rather than individual departments is becoming reality. One of the first – and certainly one of the most emotive – of these is the Ford plant in Genk, Belgium, where it makes its larger cars; also being closed are PSA Peugeot Citroen’s plant at Aulnay, near Paris, and General Motors’ Opel plant at Bochum. The axe has been hovering worryingly over a multitude of other facilities, too, including much of Fiat’s production network, while Renault has been 8 Industry Europe
locked in lengthy negotiations to avoid shedding jobs and closing factories in France and Spain. Even Honda, at its Swindon, UK plant, is railing back on its recent expansion and reducing headcount and capacity. Ford’s planned closure of Genk will remove about one fifth of the group’s European capacity, while Aulnay takes out a slightly smaller proportion of PSA’s volume. For Opel, which already closed its smaller facility in Antwerp in 2010, the shuttering of Bochum will further help reduce its European capacity. However, if analysts are to be believed, these moves will barely scratch the surface of Europe’s enormous overcapacity problem in a market that in 2012 fell a further 8.2 per cent to 12.5 million vehicles sold – the level it was at in 1995. Yet excess capacity is hardly a new phenomenon: even in the European market’s 2007 pre-crash heyday, when almost 16 million cars found
enthusiastic customers, there was talk that the boom was masking a serious underlying overcapacity issue. Today, that issue has swollen to the proportions of an existential crisis for several car groups.
Polarised market Last summer industry analysts LMC Automotive put excess capacity across Europe at some 10 million units. Yet this alarming headline figure conceals something even more shocking – a market that is deeply polarised. LMC’s estimate of an average European capacity utilisation of 66 per cent is spread across two contrasting trends: on the one hand the heavily impacted volume producers, struggling to sell their products in a collapsing market and, on the other hand, the thriving, principally German, premium brands with strong exports, an expanding market share,
