The European Market Doing Worse Than Ever image

Auto market executives, gathered at the Paris auto show, concluded that the European market is about to get worse.

If at the previous auto shows automakers were still unaffected by the insolvent European troubles, this year’s atmosphere reminded them of the 2009 Detroit auto show, where new models were presented but everybody knew the industry was facing a miserable year.

“The European car market is a disaster,” said Fiat-Chrysler CEO Sergio Marchionne. “It has plunged off a precipice that doesn’t seem to have bottomed out yet. The prospects are anything but rosy.”

According to ACEA association during the first 8 months of this year sales in Europe reached 8.6 million, down 7%. Automakers have tried to attract customers with heavy discounts to create demand, but still didn’t manage to get rid of the bloated inventories. Dealers even registered new vehicles as sold to themselves to be able to sell them as used cars at a heavy discount. Colin Dodge, Nissan Americas chairman, declared that he hasn’t seen such heavy discounting since late 2008 in the US.

“What’s been happening in the last three months is because everybody’s been stuck with a load of inventory. They pushed it, which artificially raised the total industry sales,” Dodge said. “Now they’re taking their money off the bonnet, and the total number of cars being sold is dropping more to demand.”