European automakers that began rollout of new models at the Geneva Motor Show on March 5 do not see a recovery in European automotive sector this year. While pessimist sector professionals that see a possible recovery after a long time suggest pushing sector outside Europe, even more optimist ones set their hopes to next year at the earliest for finding a cure.
It is still a tough time to be a carmaker as profits are falling as idle factories produce more costs than cars. Meanwhile in Europe, one the world’s leading auto markets, consumers aren’t buying new cars.
Renault CEO Carlos Ghosn says the European car market is going to be tough for five more years and the only way for struggling carmakers to survive is to push into other markets.
“Our industry is not an industry of rationality. It’s also an industry of emotions. It’s about brands, it’s about attractive cars, it’s about power, it’s about handling, it’s about opinions, it’s about status,” said Renault CEO Carlos Ghosn.
But Europe’s car industry is finding it harder to recover from the collapse of the car market in 2008 than some of their rivals in the U.S. and Asia. Europeans are buying fewer new cars as their economies grow weakly, or not at all.
New car registrations in Europe dropped 8.5 percent in January - more than anyone was expecting - and that is on top of a decline of 7.8 percent overall last year to 12.5 million units.
Even bedrock Germany, the engine of Europe, was suffering: sales were down 9 percent in January and 10 percent in February, putting Europe’s largest economy and home to some of the continent’s most important mass market below the 3 million mark.
Auto executives are split over when the European car market will bounce back - or whether it will happen at all. Ford Europe’s Stephen Odell and Renault’s Ghosn put it at least three years out.