Capacity Crunch in Europe is Coming

Oct 25, 2012, 08:02 ET from

BROMSGROVE, England, October 25, 2012 /PRNewswire/ --

The decision by Ford to close its Genk manufacturing plant underscores the problem faced by volume car players in Western Europe's declining car market, says industry analysis website

"The problem, in a nutshell, is matching supply with demand in a market that is more than 20% off where it was in 2007," says just-auto editor Dave Leggett.

Ford's actions to reduce cost highlight just how serious things have now become.

"Ford, a relatively strong performer in the European marketplace in recent years, is being hit hard on its bottom line. A projected US$1bn loss on its European operations this year is, rightly, hard to take. Patience has run out. The losses are of a scale and projected longevity that have been deemed unacceptable," Leggett says.

just-auto's latest analysis suggests that there is more restructuring - including plant closures - to come in Europe.

"It's partly the severity of the current recession and partly a result of inaction historically which has left several OEMs top-heavy with capacity. The squeeze on profits for major volume players is also part of a long-term trend reflecting the rising share of premium and Asian brands in Europe's car market," Leggett adds.

"What we can hope for is that a healthier and more sustainable European automotive industry is the eventual result of the restructuring that lies ahead. Doing nothing and simply taking higher costs on the chin, or expecting bailouts from governments in the form of scrappage incentives, do not - in the world of 2012 - look like a sensible option for long-term survival."

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Established in 1999, just-auto is a leading online resource for the global automotive industry, publishing around 50 news articles, analysis features and insights every working day. Under the direction of Managing Editor David Leggett, its experienced team of journalists, consultants and analysts provide a unique blend of that is delivered to over 90,000 business executives per month.

Via its website, webinars and QUBE, CONSULT and PLDB research platforms, just-auto offers insight into OEM and supplier corporate strategies, manufacturing developments, in-depth management briefings, supplier technologies and innovations, component market trends and forecasts and current/future car model programmes.

For details of how just-auto is "helping decision makers make decisions" visit

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