What is in this article?:
- European Automakers on Bumpy Trail to Slow Comeback
- Pent-Up Demand a Structural Plus for Automakers
Pent-up demand after six years of declining sales is a structural plus for the industry, but it is up against a population that not only is aging but also is growing slowly.
Car-sharing advocates tout economic advantages.
Pent-Up Demand a Structural Plus for Automakers
Overcapacity is not a problem for everyone.-Kia, whose market share has grown 12.3% since 2007, added capacity in Turkey in July. opened a factory in Hungary last year and Audi opened a new line there this year. will start making Minis next year at the Nedcar plant in the Netherlands, where WardsAuto/AutomotiveCompass forecasts production of 17,000 units in 2014.
If the additional volume comes from Southern Europe as UBS forecasts, that should help, Peugeot Citroen and , which are relatively strong in those countries.
Although the market seemingly has bottomed out, structural problems will confound European automakers’ efforts to sell cars as they did before 2008.
“It’s not only a lack of money,” says Prillieux. “There have been changes in how we use cars. We keep them longer, we drive less, people turn to car-sharing services and car pooling, and more cities are making rules about what can drive there.
“People are hesitating to buy. There has been a change in mentality.”
Pent-up demand after six years of declining sales is a structural plus for the industry, but it is up against a population that not only is aging but also is growing slowly. People of working age buy more vehicles and do more driving than retirees.
In a paper he delivered in 2007, Rainer Muenz, seniorfellow at the HamburgInstitute of International Economics, reported that for Europe, “forecasts until the year 2050 project both substantial aging as well as a declining population at working age and a substantial increase in the number of retired people.”
Car-sharing and car-pooling reduce the number of vehicles required to provide individual transportation, and both are growing fast in Europe.
Blablacar, which started in France in 2004, now matches drivers and passengers for shared trips in eight countries. Chief Operating Officer Nicolas Brusson says 2 million miles (3.2 million km) on the road “have been shared by members of the community.”
Bundesverband CarSharing, an industry association for 140 car-sharing systems in Germany, says 453,000 people there were registered members at the beginning of the year.
The economic argument to potential users on its website is clear: You need to work more than two months a year to possess your car. More than 50% of the monthly costs are fixed costs – depreciation, repairs, taxes, insurance… A small car like the Opel Corsa will cost you, at mileage of 15,000 km (9,000 miles) per year, a whopping €335 ($447) month after month.”
Individuals rent their personal cars to neighbors in one version of car- sharing. In 2009, the French research group ADEME said 35,000 to 70,000 people rented cars privately from other individuals in France, four to eight times more than subscribers to car-sharing services.
“The potential for car sharing in the private sector is high,” concludes the report, “because of the great number of cars that are used little, even very little, and the high cost of ownership.”