Europe's carmakers warn of more cuts in weak recovery
By Andreas Cremer and Laurence Frost
FRANKFURT (Reuters) - European carmakers need to close more factories and cut more jobs, executives at the Frankfurt car show said on Tuesday, warning any recovery in demand was likely to be long and slow as unemployment remained high and bank lending weak.
The bosses of automakers including Volkswagen (VOWG_p.DE: Quote), PSA Peugeot Citroen (PEUP.PA: Quote), and Ford Europe (F.N: Quote) said on the opening day of the biennial event that sales in Europe appeared to be stabilizing after five years of decline.
But recovery was not assured and likely to take years with the industry still needing to cut capacity to staunch losses at some manufacturers and ease price pressures on all, they added.
Peugeot, which incurred the wrath of French ministers and workers last year by scrapping a major factory and 8,000 jobs, said it would seek more plant cutbacks from unions.
Volkswagen (VW) chief Martin Winterkorn said the European industry could do with closing around 10 factories, although he stressed the German carmaker itself did not need to make cuts thanks to strong growth in the United States, China and Russia.
"Europe still has to be viewed with skepticism," he said, adding sales across the region were down about 3-3.5 million since 2007.
"Basically, it's 10 factories that could be closed ... Thank God there are other areas we have growth," he added.
Peugeot, which lost 5 billion euros last year and clung to life with a share issue and French bailout, is more exposed to weaker southern European markets than many rivals, and also has less of a presence in the more robust luxury car segment. Continued...