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American And French Car Manufacturers: Purging Without Imagination?
By John Taylor
The American and French car manufacturers are facing more and more problems due to the fact that they are not adapting very well to the ever changing markets. However, European car makers have demonstrated that there is an exit out of the woods. While Fiat is making a spectacular return on niche markets, the Volkswagen group is keeping its European leadership.
The hardening of the plan of reorganization of Ford did not convince anybody, and especially not the financial markets. How else could it have been if the manufacturer has adopted a traditional strategy of reduction of the costs? Admittedly, this purging will inevitably have a positive impact on the accounts. But it is not likely to start it again if Ford is on the way of the development whereas its marketshares decrease unrelentingly on the other side of the Atlantic. A report which is also worth for its large American competitor General Motors. The fact that GM removed, during ten last years, 60 % of its manpower did not draw it from the rut.
For the American manufacturers, the report is clear: their offer does not answer the expectations of the market. Their enormous 4×4 is penalized by the rise of the gasoline. They are not present enough on the segment in growth of the "crossover", these 4×4 equipped with a truck motorization. And, next to them, the Asian ones (Toyota, Honda, Nissan, Hyundai) show more inventiveness in increasingly required vehicles of niche. Because, in the car as in other industries, such as the pharmacy or technologies information, the key of success resides more than ever in the innovation, the capacity to put quickly on the market original and effective products. Thus FIAT, which one did not give chances of rectification not so long time ago, today is having a spectacular come-back success thanks in particular to the success of its new Punto.
The example of FIAT shows consequently that hopes of rebound exist in the automobile sector. At the same time, the margin of error narrows more and more, in particular as regards launching of new models, because the competition is increasingly wild on the market, in particular in Western Europe. And there are the French manufacturers who are going to face the same problems, as the last figures of the European market prove. Admittedly, the situation of Renault and PSA is not comparable with that Ford and General Motors. However, the problems start to accumulate: loss of marketshares, failure of certain models (Peugeot 1007, the Citroen C3 Pluriel), underutilization of the facilities, too great dependence on the European market, without forgetting the departure of the PSA chairman.
Important strategic choices will undoubtedly have to be made in the near future which, taking into account the place of the car industry in the French economy, will be perhaps full of consequences. Two questions in this respect. The first regards the negotiations which are currently being carried out between Renault-Nissan and General Motors: is American the best possible partner, knowing his difficulties? In the opposite direction, is the splendid isolation of Jean-Martin Folz at PSA the good solution when the Volkswagen group is seen, reinforced by Audi, Seat and Skoda, today's leader in Europe?
John Taylor is a journalist who has written more articles on this issue and published them at Best Free Library Worldwide .
About the Author
John Taylor is a journalist who has written more articles on this issue and published them at Best Free Library Worldwide .
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