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09-25-04, 07:09 AM
2004 Paris Auto Show
Asians batter Big 3 in European market
Detroit automakers lose market share, cut back production as Toyota, others ramp up output
By Christine Tierney / The Detroit News
PARIS — For Americans touring Europe’s largest car show, the sense of deja vu is palpable.
Aggressive Asian automakers with deep pockets, new factories and a trove of new models are beating back the continent’s traditional powers. Only here, the companies taking the biggest pounding are the European brands owned by Detroit’s automakers.
Over the past week, General Motors Corp. and Ford Motor Co. announced aggressive plans to cut auto production in Europe and bring output in line with sales. GM and Ford executives are embracing deeper cost reductions to stem financial losses in a region that was once a rich source of profit for the U.S. auto industry.
By contrast, Toyota Motor Co.p. this week raised its European sales target. Company officials skirted questions from reporters at the Paris auto show about whether the Japanese auto giant would build its next plant — it has eight now — in eastern or western Europe.
Its European profit in the April-June quarter grew fivefold to more than $270 million.
So far this year, although the European market is down slightly, sales of the combined Japanese brands have risen 8.7 percent.
Toyota announced that after a 12 percent sales increase in the first eight months of 2004, it now expected to sell more than 900,000 vehicles in Europe this year — up from its previous forecast of 860,000 units.
“Toyota will enjoy its eighth consecutive year of record sales in Europe and bring us closer to our 2010 challenge of 1.2 million units in annual sales in Europe,” said Takis Athanasopoulos, executive vice president of Toyota Motor Europe.
Japan’s Nissan Motor Co. is gearing up to introduce five new models here. And Honda Motor Co. says its 2005 European sales should rise at least 32 percent to 300,000 units with the introduction of two additional models equipped with popular diesel engines.
Korea’s Hyundai Motor Co. has gained a half-point of market share in Europe over the past year — more than any other manufacturer competing in the region.
The Asians’ inroads — they now hold 17 percent of the Eastern and Western European markets — have turned up pressure on all automakers, cutting into their profits.
Volkswagen AG, Europe’s biggest automaker, has seen profits plunge and hopes to freeze union wages in Germany for the next two years. Italy’s Fiat Auto SpA is struggling to return to profitability after several years of losses and stagnant sales.
GM’s European market share has inched up to 9.6 percent this year, while Ford has seen its market share climb to 11.4 percent through July, up from 10.9 percent for all of 2003.
But Ford and GM are losing money even despite restructuring.
“Two years ago GM was losing market share and losing money, but with new product, we are now gaining market share but unfortunately still losing money,” GM Chairman Rick Wagoner said. “Pricing in Europe is much tougher than we had forecast, and structural costs are just too high. We’re way behind the objective we set at the start of the year.”
Last week, Ford said it would close one of the three factories producing Jaguar cars in Britain, laying off 1,150 workers. Company officials say more cuts in the money-losing division may be needed.
The middle-market Ford of Europe division is driving down costs but also expects to end the year in the red, although it recently slashed 6,700 jobs in Britain, Belgium and Germany.
GM has lost $3 billion in Europe since 1999. This week, Fritz Henderson, GM Europe’s new chief, said the company would cut production capacity, probably in Sweden or Germany, because sales had not increased enough to soak up idle capacity at its Saab and Opel factories.
“We had assumed when we set the (last restructuring) plan that we would increase market share and volume,” Henderson said. “But picking up even a tenth or two-tenths of a percentage point of share in Europe is extremely difficult.”
Sales of GM’s brands, including Vauxhall in Britain, are flat so far this year.
For Ford and GM, lackluster or aging model lineups lie at the root of the problem.
Although Ford and GM have scored big hits, such as the Ford Focus compact and GM’s Opel Zafira minivan, their performance has been inconsistent. The American automakers have lagged the industry in providing cars with diesel engines, which now account for one in two car sales in Europe.
In addition, frequent management changes produced short-term fixes but failed to address long-term, strategic challenges.
Ford’s Premier Automotive Group, which includes Jaguar, Land Rover, Volvo and Aston Martin, and GM Europe have each had two bosses in three years.
GM’s Germany-based Opel brand has a new boss, as does the Ford of Europe division. GM Europe’s operations have been centralized, decentralized and now re-centralized in Zurich.
Restructurings are so frequent that industry experts lose track.
Detroit automakers are counting on new products to bolster their turnaround efforts here. Opel’s new Astra, its offering in Europe’s ferociously competitive compact segment, has earned good reviews and its share of the segment has increased to 13 percent from 11 percent a year ago, according to British data consultancy JATO Dynamics.
But that is far below the Astra’s 1998 share of 21 percent.
At the Paris show, Opel displayed a hatchback version of the Astra and a variant with a panoramic windshield extending up over the front passenger seats.
source HERE (http://www.detnews.com/2004/autosinsider/0409/25/a01-283641.htm)
Asians batter Big 3 in European market
Detroit automakers lose market share, cut back production as Toyota, others ramp up output
By Christine Tierney / The Detroit News
PARIS — For Americans touring Europe’s largest car show, the sense of deja vu is palpable.
Aggressive Asian automakers with deep pockets, new factories and a trove of new models are beating back the continent’s traditional powers. Only here, the companies taking the biggest pounding are the European brands owned by Detroit’s automakers.
Over the past week, General Motors Corp. and Ford Motor Co. announced aggressive plans to cut auto production in Europe and bring output in line with sales. GM and Ford executives are embracing deeper cost reductions to stem financial losses in a region that was once a rich source of profit for the U.S. auto industry.
By contrast, Toyota Motor Co.p. this week raised its European sales target. Company officials skirted questions from reporters at the Paris auto show about whether the Japanese auto giant would build its next plant — it has eight now — in eastern or western Europe.
Its European profit in the April-June quarter grew fivefold to more than $270 million.
So far this year, although the European market is down slightly, sales of the combined Japanese brands have risen 8.7 percent.
Toyota announced that after a 12 percent sales increase in the first eight months of 2004, it now expected to sell more than 900,000 vehicles in Europe this year — up from its previous forecast of 860,000 units.
“Toyota will enjoy its eighth consecutive year of record sales in Europe and bring us closer to our 2010 challenge of 1.2 million units in annual sales in Europe,” said Takis Athanasopoulos, executive vice president of Toyota Motor Europe.
Japan’s Nissan Motor Co. is gearing up to introduce five new models here. And Honda Motor Co. says its 2005 European sales should rise at least 32 percent to 300,000 units with the introduction of two additional models equipped with popular diesel engines.
Korea’s Hyundai Motor Co. has gained a half-point of market share in Europe over the past year — more than any other manufacturer competing in the region.
The Asians’ inroads — they now hold 17 percent of the Eastern and Western European markets — have turned up pressure on all automakers, cutting into their profits.
Volkswagen AG, Europe’s biggest automaker, has seen profits plunge and hopes to freeze union wages in Germany for the next two years. Italy’s Fiat Auto SpA is struggling to return to profitability after several years of losses and stagnant sales.
GM’s European market share has inched up to 9.6 percent this year, while Ford has seen its market share climb to 11.4 percent through July, up from 10.9 percent for all of 2003.
But Ford and GM are losing money even despite restructuring.
“Two years ago GM was losing market share and losing money, but with new product, we are now gaining market share but unfortunately still losing money,” GM Chairman Rick Wagoner said. “Pricing in Europe is much tougher than we had forecast, and structural costs are just too high. We’re way behind the objective we set at the start of the year.”
Last week, Ford said it would close one of the three factories producing Jaguar cars in Britain, laying off 1,150 workers. Company officials say more cuts in the money-losing division may be needed.
The middle-market Ford of Europe division is driving down costs but also expects to end the year in the red, although it recently slashed 6,700 jobs in Britain, Belgium and Germany.
GM has lost $3 billion in Europe since 1999. This week, Fritz Henderson, GM Europe’s new chief, said the company would cut production capacity, probably in Sweden or Germany, because sales had not increased enough to soak up idle capacity at its Saab and Opel factories.
“We had assumed when we set the (last restructuring) plan that we would increase market share and volume,” Henderson said. “But picking up even a tenth or two-tenths of a percentage point of share in Europe is extremely difficult.”
Sales of GM’s brands, including Vauxhall in Britain, are flat so far this year.
For Ford and GM, lackluster or aging model lineups lie at the root of the problem.
Although Ford and GM have scored big hits, such as the Ford Focus compact and GM’s Opel Zafira minivan, their performance has been inconsistent. The American automakers have lagged the industry in providing cars with diesel engines, which now account for one in two car sales in Europe.
In addition, frequent management changes produced short-term fixes but failed to address long-term, strategic challenges.
Ford’s Premier Automotive Group, which includes Jaguar, Land Rover, Volvo and Aston Martin, and GM Europe have each had two bosses in three years.
GM’s Germany-based Opel brand has a new boss, as does the Ford of Europe division. GM Europe’s operations have been centralized, decentralized and now re-centralized in Zurich.
Restructurings are so frequent that industry experts lose track.
Detroit automakers are counting on new products to bolster their turnaround efforts here. Opel’s new Astra, its offering in Europe’s ferociously competitive compact segment, has earned good reviews and its share of the segment has increased to 13 percent from 11 percent a year ago, according to British data consultancy JATO Dynamics.
But that is far below the Astra’s 1998 share of 21 percent.
At the Paris show, Opel displayed a hatchback version of the Astra and a variant with a panoramic windshield extending up over the front passenger seats.
source HERE (http://www.detnews.com/2004/autosinsider/0409/25/a01-283641.htm)