Report: Japan carmakers downsizing in Europe as market shrinks
16 January 2011
The Nikkei writes that Daihatsu Motor Co.’s withdrawal from new-vehicle sales in Europe and Mitsubishi Motors Corp.’s decision to cut stop producing the Colt subcompact there highlight the a downsizing trend in Europe for Japanese carmakers as the new-vehicle market there shrinks. The EU market for new passenger cars declined by 5.5% in 2010, with a total of 13,360,599 new units registered throughout the year, according to figures from the European Automobile Manufacturers’s Association (ACEA). (Earlier post.)
Daihatsu announced on Friday that it will discontinue auto sales in Europe on 31 Jan. 2013, though it will continue after-service operations in the market.
Mitsubishi and Daihatsu are not alone in struggling in Europe. Toyota Motor Corp. shut one of two production lines at a UK factory last August, shifting its focus to emerging markets. Toyota estimates that its European sales likely dropped 10% on the year to about 800,000 units in 2010. Honda Motor Co.’s (7267) sales in the region plunged 25.1% on the year to some 173,000 units for the January-November period.
In Germany, the largest car market in Europe, new-vehicle sales tumbled 23% to about 2.91 million units last year, the first drop below 3 million in 21 years. The government ended its subsidies for replacing old cars in September 2009. Such incentives also expired in Italy and elsewhere. With European governments carrying out austerity measures, the auto sales slump is expected to continue. The European Union will tighten carbon dioxide emission rules from 2012, with a goal of curbing exhaust on new vehicles to an average 130 grams per kilometer by 2015. “Many challenges lie ahead for this goal to be achieved,” says a senior official at Mazda Motor Corp.
They cannot downsize their cars much more.
So they downsize the car makers.
What's next - the people?
Start the cycle anew.
Posted by: ToppaTom | 16 January 2011 at 06:55 AM
Wild unchecked speculation, shameful lobbying and badly regulated banks and insurances in USA allowed the embezzlement of over $5T during the last decade. This large monetary drain created a serious economic recession throughout the Americas and Europe. With the best concerted efforts, it may take most of the current decade to correct the situation. Meanwhile, by lowering taxes on people with very large revenues, USA has made matter worst. The embezzlers have been given a free hand to do it again.
Asia will eventually also suffer. Their lower production cost will smooth the effect to a certain degree. They will have to adjust if they want to maintain their diminishing exports and rising standards of living. Countries like China and India, with very large population and low wages will compete more vigorously and our industries will suffer some more. Japan and EU will also me affected.
Posted by: HarveyD | 16 January 2011 at 07:10 AM
coorection:
.....also me affected....should read ...also be affected.
Posted by: HarveyD | 16 January 2011 at 08:00 AM
This is not unexpected as the incentive did not really stimulate the sale of new cars, people simply replaced the car they already were about to replace a bit earlier.
Posted by: Arne | 16 January 2011 at 01:15 PM
“Meanwhile, by lowering taxes on people with very large revenues, USA has made matter worst. The embezzlers have been given a free hand to do it again“
This makes no sense. A callous call for class warfare.
Posted by: ToppaTom | 16 January 2011 at 02:08 PM
I agree withb tom, the likely inheritors of the planet will be downsised.
I haver never seen coackroahes driving autos though - maybe some parts of Mexico?
Posted by: Arnold | 16 January 2011 at 11:11 PM
There's one simple reason - small Japansese cars are ugly with 'cute' faces and horrific egrenomics (instrument binnacle in the middle anyone). That's why I won't buy one, even if they did a zillion mpg.
Its a shame that the more 'normal' side of the Japanese production misses Europe out. I quite liked the look of the Nissan Altima which could have broken into the family segment. Aside from the Nissan Quasquai (Japanese for 'Cash Cow' since that's what motorists are in the UK) But no, other than that we just get awful shopping trolleys which are only attractive to people who are not interested in driving (and therefore drive badly).
The next UK strategy will be to make cars so ugly no-one will want to buy them and will prefer to travel by rickshaw instead.
Posted by: Scott | 17 January 2011 at 10:43 AM