No Stopping Luxury Brand Growth
Long-term
prospects look more
positive than the
current pressure car
markets are facing.
by Sean Milmo
Europe Correspondent
milmocw@rodpub.com
On the face of it the outlook in Europe for OEM automobile coatings looks grim at the moment.
The region is estimated to have a 20 percent
overcapacity in car manufacturing so that plant
closures are seen to be sooner or later inevitable.
PSA Peugeot Citroen of France, which
made an operating loss last year, and Opel-Vauxhall, the European business of General
Motors, appeared in February to be on the
brink of forging an alliance in the region,
which analysts say could lead to at least two
plants being shut down.
Fiat of Italy, which lost €500 million ($665
million) in 2011 is also under pressure to close
uneconomical capacity.
Automobile sales in the European Union
have still not recovered from the 2008 financial
crisis. Last year’s car registrations in the EU
were at the same level of 1997 and around 2.5
million below that of 2007.
However in the longer term prospects for automobile coatings in Europe are much healthier
than they would appear to be from sales and
overcapacity figures.
The current acute problems with the European car industry are mainly confined to its high
volume, lower priced cars, which are the most
susceptible to competition from outside Europe,
particularly Asia, and are mostly being built in
Western European plants.
In neighbouring Eastern Europe including
Russia, which is classified as part of the world’s
emerging economies, car production has been
recovering quickly after a post-2008 downturn.
Most of the leading Western European car
companies and several Asian automobile manufacturers have plants in the area to take advantage of its low costs. Kia of Korea, which has a
large plant at Zilina, Slovakia, increased its European sales by 21 percent last year.
Premium brands, particularly the big German three of Mercedes-Benz, BMW and Volkswagen’s Audi, are doing well, especially in
non-European export markets.
Germany’s sales of exported cars went up last
year while those of the UK rose by six percent despite a slide in its domestic automobile sector. The
UK has become the export base for non-European
car manufacturers such as Nissan, Toyota and
Honda of Japan and Tata Motors of India.
A thriving export market for European-made
cars has enabled Europe to maintain its position
as a developer of new automobile technologies,
including coatings, which are ultimately rolled
out across the world.
Europe is ahead of most regions in the world
in implementing regulations curbing emissions
from cars of CO2 and other global warming
gases as well as of particulates. As a result the
