Bad news continues for Ford and GM shareholders as the companies lose share. Fiat-owned Chrysler is also negatively affected, though Chrysler is a bit player in Europe.
EU new vehicle registrations continued their downward slump in September by declining 11% from September 2011. It was the twelfth straight month of sales declines across the economically embattled Eurozone as the trade bloc comprised of 27 bickering nations heads for its fifth straight year of declining sales. September accounted for sales of just 1,099,264 light vehicles. Nine months into another disastrous year, the tally was off -8%, with 9,368,327 new cars registered.
Even the German market – mostly immune to the crisis thus far and the second largest market after the UK in September – declined 11% to 250,000 units in September. The UK – because it was new registration plate month – fared much better at 360,000 or +8%, but that was really the only good news in the region, unless you count Slovakia’s 47% gain to 7,000. Other hard hit large countries included Number 2 France (138,000, -18%), Number 4 Italy (109,000, -26%) and Number 5 Spain (35,000, -37%).
The challenges for the Detroit Three continue to increase as sales continue to decline. GM Group, largely dependent in Europe on loss-making Opel/Vauxhall saw year-to-date sales drop from 891,000 units to 779,000 or -13%. That is more than 110,000 vehicles, or half a final production plant in Europe, which already has far too many. (Only Volkswagen Group with basically flat sales – 2.3 million, -1% – appears to be unscathed. VW Group remains by far the largest force in the market with its 25% share, more than the combined output of the PSA (12% share) and Renault Groups (8.4% share) combined.
GM is planning to close its Opel Zafira plant in Bochum, Germany after the run-out of the current Zafira van in 2015, but that alone is not enough to return Opel to profitability after decades of losses totaling hundreds of billions dollars. (GM Q2 Profits Drop to $1.5 Billion From $2.5 Billion as Its European Losses Grow. Revenue and Cash on Hand also Decreased.) Opel employs 20,800 people in Germany, and more than 40,000 across Europe. The head of GM Europe was ousted in July over the continuing losses and the lack of progress.
Ford Motor saw ytd sales decline to 716,000 from 820,000 (-13% and share at 7.6% is off half a point), also a half of a final assembly plant. Ford will now lose at least $1 billion in Europe this year, but has offered no specifics on how it will stem what are also decades of losses. (Ford Motor Q2 Profit Plummets $1.4 Billion as Europe, South American and Asia Continue to Hurt Earnings and Shareholders)
“Our share decline has not come as a surprise given we decided to continue to stay out of unsustainable short-cycle business as much as we can. We expect to benefit from an unprecedented rollout of new cars, sports utility vehicles and commercial vehicles with award winning technologies as we move forward,” said Roelant de Waard, vice president, Marketing, Sales and Service, Ford of Europe.
At a meeting with dealers and employees in Amsterdam in September, senior executives outlined the latest Ford European turnaround plan that hinges as always on new products. Large car, SUV and commercial vehicle segments were cited as areas where growth could be profitably attained. All told, fifteen so called global vehicles will be on sale in Europe within five years, but the bulk of Ford recovery plan depends on traditional European fare such as the Fiesta, Kuga, Mondeo and Transit, previously touted as comeback models under earlier European turnaround plans that did not work.
Fiat Group, the owner of Chrysler, saw sales drop ytd to 609,000 from 736,000 – once again half an assembly plant, not counting the continuing negative effect on its components plants and suppliers. For the first 9 months of 2012, Fiat Group had a 6.5% marketshare, primarily reflecting the Italian economic disaster, where the auto market has fallen to levels last seen in the 1970s. In September, Fiat’ Group’s share was 6%, off from 7.3% y-o-y. For the first nine months of the year, Lancia/Chrysler sold around 75,000 cars in Europe, with market share stable over the same period one year ago at 0.8%. Jeep posted September sales of more than 2,000 vehicles, representing a 0.2% share of the European market. Year-to-date, Jeep brand sales are in excess of 21,200 vehicles. For Ferrari and Maserati, the Group’s luxury and performance brands, combined sales totaled 257 units for September and 3,346 units year-to-date.
Last week at an industry event, Sergio Marchionne, ACEA President and CEO of Fiat SpA, outlined the impact of the economic crisis on the European auto industry. “With sales on a downward trend for the past five years running, most automobile manufacturers are losing money in Europe at the moment,” Marchionne said. “And the outlook is far from rosy, as we now expect new car registrations to decrease by between 8-10% compared to 2011. It is a question of survival for many manufacturers who are struggling to sustain the same level of capacity as in pre-crisis times.”
In Q2 Fiat lost €246 million with the Chrysler contribution backed out of the results. (Chrysler Group Q2 2012 Profit Totals $755 million) The irony of once bankrupt – but increasingly healthy – Chrysler now bailing out Fiat is noted here. Among the bigger problems Chrysler now faces is the sickly state of its Italian parent company, and what effect it will have on future product plans.
See also:
- EU Cars Sales Drop 9% in August as Eurozone Crisis Continues
- EU Passenger Car and Commercial Vehicles Sales Down Again
- PSA Peugeot Citroën to Reorganize, Close Aulnay Plant
- Automakers Protest EU Korean FTA Deal is One Sided
- Ford Inflatable Rear Seat Belt to Debut on New Mondeo
- Ford and PSA Peugeot Citroën to Drop JV on Diesel Engines
- Ford Motor CFO Booth, Global P.D. Head Kuzak to Retire
