Overcapacity in Europe to persist for 3 years, say IHS analysts

Article by Anita Panait, on June 26, 2013

Excessive production capacity in Europe will continue to be the case for at least another three years, analysts at IHS Automotive disclosed to Automotive News Europe. According to Denis Schemoul , IHS Automotive's head of Europe vehicle production, they expect the overcapacity  situation to improve once production volumes have recovered, i.e. on the 2016 to 2017 period.

Carmakers are currently dealing with excessive capacity by shutting down their sites or shifting production to Europe from other parts of the world. According to IHS figures, over half of Europe's 160 vehicle sites operated below 70 percent of their total capacity in the first quarter of 2013.

In first three months of this year, 85 sites were operating at 70 percent or below, compared with 74 plants in the same period in 2012. A plant typically has to use around 75 percent to 80 percent of its total capacity to break even.

Philippe Jean, head of the automotive industry unit of the European Commission's Enterprise and Industry Directorate General, Automotive News Europe Congress last week that figures showed that the overcapacity problem is “more widespread than people thought,” adding that it is felt across Europe.

According to Jean, one solution would be to have strained plants keep paying workers while running the production line three out of every four weeks a month. He said plants could use the off week to “ensure they have better training and to have new technologies. Jean blamed the failure on "lack of consensus" among EU states and carmakers for the continued persistence of this overcapacity problem. [source: automotive news - sub. required]

Topics: europe

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 2017
The 2018 model year could be an exciting year for fans and enthusiasts of the Chevrolet Corvette. This comes as the 2018 version of the Corvette is bound to feature...
by - January 19, 2017
As if seeing the future more than a decade from now, one of the top scientists in the world of robotics and automations is predicting that children born today won’t...
by - January 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries