French Automakers Predict a Grim Future in Europe image

The French automakers, gathered for the Paris auto show, issued grim warnings concerning the ongoing European debt crisis.

Renault has already given up its European market forecasts, saying that its sales target for 2012 is under pressure. In July Peugeot announced it will lay off 8,000 employees and will close a plant near Paris, and now it predicted that rivals will soon be forced to do so too, if they want to survive in the European market. Europe faces a slump in the auto market not seen in decades and the most affected are Opel, GM, Ford and Peugeot.

“Some of our competitors in Europe are losing even more money than us on every car they sell,” said Peugeot’s Chief Executive Philippe Varin. “We’ve laid out our plans, but other manufacturers will have to take similar steps.”

Renault still hopes it will reach positive operating cash flow by the end of this year, despite the fact that outlook darkens. The automaker predicted that the French market will drop 13% and the European market 7-8%, up from the previous forecast of 11% and 6-7% respectively. Renault cannot give any assurance that it will not make job cuts, and asks the government to improve industrial competitiveness.