Successful European car industry strategies?

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The European Car industry is still under severe strain. Because of the so called policy of austerity, which is predominantly driven by Germany and a few other European countries, the demand for goods, including cars of course, is drastically on the decline, especially in Southern Europe.

European car producers, therefore, seek to sell their cars elsewhere, for instance to the US and China. Russia looked to be prospering and could have turned out to be the biggest car market in Europe – even ahead of Germany – but given the current circumstances, no one knows which course Russia is sailing under Putin´s command.

So, at the moment, Russia is a “failed state”, in respect of demand for cars. Let’s take the German manufacturers aside for a moment and look at who else there is. Unfortunately, we don’t find very encouraging signs: PSA is now a company which will be dominated by Dongfeng (literally East Wind in Chinese), one of the three largest Chinese car manufacturers. PSA concentrated too long on the European markets and, as a consequence of the demand crisis in Europe, it was hit even harder.

Now, with the help of Dongfeng, they will try and divert production to the Chinese market as well, where Citroen already plays an important role but Peugeot is almost unknown. Where Fiat is drifting to is – somehow – mysterious.

Yes, there is some success for the Cinquecento in the hip quarters of cities in the US, but here in Europe a large part of the Fiat model family needs to be renewed. Punto and Bravo are old and just relying on the Fiat 500, and its derivatives, is probably not the smartest thing to 06 / do. Because, on one hand, they might be not as successful as the Mini “offspring” and, on the other, the margins in this segment are far too low to support the whole brand – not to mention the Fiat Chrysler group. Fiat will rely on the small and compact SUV segments which are still prospering and, at the other end of the market, it looks as if Maserati is doing a very good job. This make could be the exclusive and elegant pendant to the so-called premium makes from Germany and is – together with Jaguar – a very beautiful alternative to the often very clinical German design.

One rising star and a falling one: Lancia. This traditional make will only be available in the future in Italy. After the Delta days, this make was known for strange design experiments and therefore the decision is hard but absolutely right.

Renault seeks salvation in co-operating with Mercedes and, of course,

Nissan and besides that they want to enlarge their E-fleet which, under current circumstances, could turn out to be the “wrong horse”.

The biggest growth market for German cars is the US, although Volkswagen still struggles to establish a dominant role. But, because the US has a large export deficit, the EU and North America want to settle the free trade agreement.

It is fair to say, however, that such an agreement would favour Germany and the US would become its biggest export market. France’s position as the biggest trade partner of Germany would be weakened.

It is high time, therefore, to understand Europe as a team and not as a bunch of (sometimes) skilful soloists

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