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AUTOS' WORLD COMMENT & OPINIONS
* Guess who's spooking the Europeans?
As Japanese and Korean sales grow, everyone else is left to fight over the scraps
GENEVA, Switzerland: Geneva Motor Show, by Neil Winton -28 Feb 2006: -- European car manufacturers are about to whip the dustcovers off their latest creations at the annual Geneva Motor Show, and although they might not yet be dogged by bankruptcy concerns like General Motors and Ford in the U.S., the industry here is fighting a desperate, uphill battle to fend off the same enemy - competition from Asia... European car sales have stagnated in recent years - moving up about 1 percent one year, then down about the same the next. Investment bankers like Sabine Blumel, European analyst for Banca IMI of Italy, expect more of the same in 2006 - "growth” of not much more than about 1 per cent... But this moribund market masks a burgeoning threat... Asian sales have grown steadily, from a 12 percent market share in 2001 to over 17 percent last year... In 2005, Hyundai sold just over 300,000 cars in Europe and its Kia subsidiary just under 250,000. Hyundai has said it wants to more than double sales to 800,000 by 2010. Kia wants to double sales to 500,000 by 2008... Investment banker Morgan Stanley points out that the traditional barriers to competition in Europe with the elimination of the Block Exemption by the European Union are shaking up the business model. The co-called Block Exemption allowed many monopolistic and protectionists practices, but they were outlawed a couple of years ago... Capital spending by Europeans is at a 10-year low, according to Morgan Stanley... S&P said that the tough conditions in Europe underline the profit performance gap between general and premium manufacturers like BMW, which are likely to retain their above average profit margins...
* GM and Ford roll out new ideas for Europe
GENEVA, Switzerland: Geneva Motor Show, by Christine Tierney -28 Feb 2006: -- General Motors Corp. is putting order into itsEuropean lineup, slotting Chevrolet as an entry-level brand that allows the German Opel nameplate to move a bit higherand strengthen the pricing of its vehicles... At the Geneva motor show Tuesday, GM Europe unveiled the sporty Opel GT built on the same architecture as the Saturn Sky on the first press reviewday as well as a Chevrolet Captiva crossover developed at low cost by GM Daewoo in South Korea... GM's Saab brand displayed the Aero X concept coupe, which it unveiled Monday evening. The striking coupe is not expected to go into production but features design cues that are likely to appear on future Saab vehicles, assuming that Saab has a future...
* It's a thin line between profit and loss
USA -Automotive News, by Edward Lapham -Feb 27, 2006: -- The financial fate of car dealers frequently reflects what's going on with their factories during good times and bad... Right now for example, a lot of Ford, Lincoln-Mercury and Chevy dealers in the United States are finding it tough to make a buck, while most Toyota dealers are having another pretty darned good year... Thinner margins were among the most common gripes during the make meetings at NADA. Sometimes the thin margins are because new-vehicle sales are lousy, and sometimes it's because an automaker has changed its pricing structure and reduced the difference between the wholesale price the dealer pays and the sticker price... When that happens, margins get smaller, and even dealers selling the most successful, upscale brands can get squeezed, whether in North America or Europe... In Germany, for example, franchised BMW dealers are going bankrupt while the factory rings up record profits. Last year six BMW dealerships declared themselves insolvent, and 22 others just went away... The reason for the problem in Germany is simple, according to Automobilwoche, a German-language publication that ir's published by Crain Communications Inc.: Stores owned by the factory are competing aggressively with the independent dealerships. That destroys the profit margin... You see, even in the car business, it's tough to beat the house...
posted by Unknown @ 6:13 PM
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