Current production volumes are not high enough to return General Motors Europe to profitability.
GM sales in Europe continued their decline during the second quarter, even though car scrappage programs provided a strong boost to the market. Overall GM sales were 471,823 vehicles, which equaled a share of 9.2% of the market. GM sales were down 20% in the region, compared to a decline of 18% the industry. This share is consistent with GM’s year-to-date trend, but the current volumes are not high enough to make GM Europe profitable.
“While it will probably take some years for the industry to return to 2007 levels, as we are facing an unprecedented set of economic challenges due to the global economic crisis, we are working intensively with our retail network to fight for every sale and to successfully manage the business during this challenging period,” said Brent Dewar, GM Europe vice president, sales, marketing and aftersales. GM had previously estimated five years for a European recovery.
Final numbers from the European Automobile Manufactures Association will not be available until next week. But it appears that GM’s marketshare is now the same as Ford’s in Europe — a prospect it soon faces in the U.S. since it is phasing out four brands that comprise more than 4% of its 20% market share here, which will bring it close to Ford’s share.
VW remains the clear market share leader in Europe at about 12%, followed by Ford and GM, then Peugeot and Renault both at 6.9%, and finally Fiat at 7.5%.
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The latest setback comes as GM is in final negotiations to sell its loss-making Adam Opel GmbH subsidiary, which is key to it future vehicle development plans. One sticking point appears to be GM’s insistence that it have the right to buy back controlling interest in the company that goes back to the 19th century.