Warc, 7 March 2013
GENEVA: Automakers such as Renault, General Motors and Ford
are relying on strong branding and innovation to return to growth in Europe,
where the car industry faces substantial challenges.
Totals from the European Automobile Manufacturers'
Association show that the number of new vehicle registrations in the European
Union fell by 8.2% on an annual basis in 2012, to 12.1m units.
Ford, General Motors and Peugeot Citroën all logged
double-digit declines on this metric, while Renault recorded some of the worst
figures, down by 19.1% compared with 2011.
"Europe is going to be a very tough market for a while.
It's not about only 2013. It's also about 2014, 2015, 2016," Carlos Ghosn,
Renault's CEO, told the Associated Press. "The only question is, is it
going to be bad or very bad?"
In response, Renault is trying to find original ways of
engaging consumers at a time when many are delaying big-ticket purchases due to
the financial climate.
"Our industry is not an industry of rationality. It's
also an industry of emotions. It's about brands, it's about attractive cars,
it's about power, it's about handling, it's about opinions, it's about
status," said Ghosn.
For its part, General Motors, the US giant, is boosting its
expenditure on marketing, introducing new models – like the Cascada sports car
and Mokka SUV – as well as rationalising its operations.
"We are spending billions of dollars in an effort to
bring our European operations back into profitability," Karl-Thomas
Neumann, president of General Motors' European operations, told the Financial
Times.
While Ford, another American group, is seeking to reduce its
overall manufacturing capacity in Europe, it is also scheduled to launch 15
models in the region during the coming five years.
"Our new product introductions are the core of what we
are doing in Europe to improve our financial performance," Stephen Odell,
Ford's president for Europe, the Middle East and Africa. "Without new
products we are not going to get very far."
Sergio Marchionne, the chief executive of Fiat, suggested
the austerity politics being pursued in countries like Italy were bringing
mixed results, but did not want governments to help fund the sector.
"I prefer not to have incentivised items; I like
natural demand," he told BloombergBusinessWeek.
Data sourced from CNN, Financial Times,
BloombergBusinessWeek; additional content by Warc staff
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