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

Nearly a decade after Opel and sister brand Vauxhall introduced the Insignia large family car, these companies are now getting ready to unveil the second generation of this offering from...
by - December 7, 2016
After we caught a glimpse of the revamped Amarok, VW Australia once again wants to give its ute a sinister look inspired by the Mad Max movie franchise. The “Korama”...
by - December 7, 2016
Customers in the European market are known for leaning towards style and with this in mind, Nissan has revealed the special LEAF Black Edition. While the production run of this...
by - December 7, 2016
When Volkswagen unveiled the VW Atlas, it declared that this SUV is being developed for the United States and is set to arrive as a 2018 model. It also unveiled...
by - December 7, 2016
Did you miss the opportunity to get a brand new Dodge Viper? Well, here’s something you don’t want to miss. Dodge has announced a “final call” for orders for its...
by - December 6, 2016
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