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More European Plant Closings Coming – But Who’ll be First?

by on Mar.19, 2012

“Europe, today, is a place where all manufacturers have capacity problems,” says Renault CEO Ghosn.

European automakers are desperately hoping that the just-concluded Geneva Motor Show will give the industry a much-needed push.  But with the Greek debt crisis still unsettled and economic problems spreading to other parts of the Continent, few expect automotive sales to rebound this year.

That’s likely to put even more pressure on the industry to address the chronic problem of overcapacity – which by some counts is running to several million vehicles annually.  Yet while almost all industry leaders agree that plant closings are needed no one seems to want to go first.

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“Europe, today, is a place where all manufacturers have capacity problems,” says Carlos Ghosn, CEO of The Renault-Nissan Alliance.

The Brazilian-born Ghosn estimates the industry may need to shrink capacity by as much as 20%, but everyone is waiting for the other guy to blink.  “The day it starts, every manufacturer will have to follow.”

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