European Car Industry Faces Radical Shake-Up Amid Global Competition

Alex Trotman, chairman of the Ford Motor Company, warned that the European car industry, which is slowly recovering from recession, will undergo significant restructuring and consolidation in response to increasing global competition. Over-capacity and new manufacturers emerging in countries like China will force European automakers to adapt and become more competitive. This transformation is expected to be challenging, particularly for Europe, which is already lagging behind in terms of manufacturing productivity.

Key Takeaways:

• Alex Trotman predicts industry consolidation over the next 10 years, with potential major casualties, due to increasing global competition and over-capacity.
• The existing structure of the European auto industry, with six major manufacturers (Ford, General Motors, Volkswagen, Peugeot-Citroen, Renault, and Fiat), is not viable for the next 20 years.
• Trotman estimates that the current structure will lead to either consolidation or elimination, citing the example of six manufacturers producing 1.5-2 million vehicles per year.
• The European car industry faces a battle to become as competitive as rival locations, with a pressing need for improvement in manufacturing productivity.
• Volkswagen (VW) is actively seeking to boost productivity and profits, aiming to cut 30,000 jobs by 1999.
• Rumors of a potential link between Renault (France) and Fiat (Italy) have been persistent but denied.

Statistics:

• The European car industry has six major manufacturers producing approximately 1.5-2 million vehicles per year.
• Volkswagen aims to cut 30,000 jobs by 1999.
• The industry is expected to undergo significant restructuring and consolidation over the next 10 years.
• The existing structure of the European auto industry is not viable for the next 20 years.

Sources:

• Alex Trotman, chairman of the Ford Motor Company (no publication date given)
• Personnel director of VW (no publication date given)