Sergio Marchionne Thinks The European Market Has Yet To Recover
|   Sunday, March 16, 2014
Sergio Marchionne, chief of the Fiat Chrysler group, believes that the European market will not have a rebound in car sales as fast as industry analysts foresee. Sergio Marchionne is the leader of the second car group in Europe by number of brands in its portfolio, Fiat Chrysler Automobiles.

Marchionne says it is too early for carmakers to celebrate the return of sales, despite six consecutive months of increased sales of new cars on the market in Western Europe.
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Analyst forecasts for this year announce a three percent increase in sales in the region for the entire year, but they might be unrealistic values ​​explains Marchionne. These are new sales, but made for car fleet, and rent-a-car businesses, not for individual consumers.

Some industry analysts confirm the words of Marchionne, according to those from Automotive News. They explain that some dealers register the cars in their own park to artificially increase sales in order to achieve internal volume targets. This practice was common in December and January, explain those analysts who have chosen not to disclose their identity.

The sales results published by the Volkswagen group brands, BMW, Toyota and Hyundai-Kia revealed a slower decline than the industry average, while Ford, General Motors, Fiat and PSA Peugeot-Citroen have decreased both in market share and sales in the European market in 2013. The only corporations that have achieved market share gains in Europe during 2013 were Renault and Daimler.

The French have increased due to the results of Dacia, while the Germans have increased because of the A-Class and B-Class. It seems that the directors of the two corporations have guessed the potential for everyone. That's why Renault-Nissan and Daimler signed a partnership in 2010.

The European market problem is overcapacity, explains Stephen Odell, CEO of Ford Europe. In an interview with Automotive News, the head of the European division of Ford say that factories can produce 20 million units per year, but sales in this region are only 14 million units per year, which requires manufacturers to implement significant reductions to eliminate stocks or have production stops.

Ford chief operating officer Mark Fields said that "We have taken some tough decisions and we have a transformation plan aimed at returning Ford to profitability in Europe by next year. At the moment we are on track. The plan is based around three strands, product, brand and cost. We are introducing 25 new models in Europe between 2012 and 2017, and we are improving the customer experience to improve the brand image. In terms of cost we have already taken the decisions on reducing production capacity."

"We are already over supplied with cars locally and we don't have enough buyers yet the EU seems happy to sign Free Trade Agreements with South Korea and Japan. Yet every time I bring this subject up in Brussels I am rebuffed and ignored," said Marchionne in regards to the EU's stand on its member's markets.
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