VW Sees Success in Europe, Opel and Peugeot Struggle image

While VW sees its market share in Europe increase to about one third by 2020, PSA Peugeot-Citroen and Opel will be in mortal danger by then.

Bernstein Research analyst Max Warburton says that if the governments do not interfere to save the weakest, will continue to share losses until they will be forced to disappear from the market, while VW’s share in Europe will be close to 24% by the end of this year.

Renault, Peugeot-Citroen, Fiat, Opel and Ford Europe are expected to report total loses of $8 billion by the end of this year, with Peugeot-Citroen accounting for almost $2 billion of that. LMC Automotive predicts that auto sales in Western Europe will drop 8% by the end of this year and 4% in 2013.

“If current trends continue, some will be forced to retrench. Recapitalisations, state involvement and even nationalization may prolong the process,” Warburton said.

In 2009 the French government offered Renault and Peugeot-Citroen $3.8 billion each, and last month Peugeot-Citroen was offered other $9 billion with some strings attached, among which to offer the socialist government a seat in the company’s board. But instead of using the money to take harsh decisions, such as cutting costs like the Germans, the French companies chose to use the cash to ride out the storm.