Saturday, November 8, 2008

When I Say Bad, I Mean Good: Europe Sees 8 Percent Slump

Bad news (or, if compared to anorexic America, good news) from J.D. Power: Western European auto sales fell by 15.5 percent to 1,035,243 million units in October from a year earlier, reports Automotive News (sub) . They say, the decline in new-car sales in Western Europe could be worse than a slump in the early 1990s. Contrast that to “the worst sales month in the post World War II era,” which GM’s Chief (Non-) Sales Analyst just saw for his employer in North America.

Everything being relative, America's relatives in the Old Country still have it relatively good. If J.D.Power’s crystal ball is still functioning, the Western European car market may decline by 8 percent in 2008, and go down between 10 and 11 percent in 2009. J.D.Power came to the not all too surprising conclusion that this would “place major strains on the European auto industry.” As opposed to the end of the world, which is generall being announced in the U.S. of A. Note: As long as the VW stock goes for between €500 and €1000, depending what time of day it is, or the whims of Porsche may be, as long as BMW’s owneresse can afford millions to pay a gigolo, the European market will be just fine. All things, considered, of course.

Chinese Car Dealers Cry, Close

Ever wondered why cars can be so cheap in China? Now we know why: More and more cars are being sold at a loss in China, Gasgoo reports. In WTO terms, this will probably be misinterpreted as domestic dump(l)ing. While Chinese dealers are accustomed to the same clear-the decks strategies at year’s end as their Western colleagues, the price cuts come a bit too early in the now Middling Kingdom.
Like their Western brethren, Chinese dealers are used to profit margins between 3 percent and zilch. But now, more often than not, it’s south of nada. No wonder many Chinese dealers are following the worldwide trend, close their lot, and seek other employment. Like teaching English (see picture.) A third of them are expected to close shop by year’s end. The more vociferous ones are blaming the manufacturers for overstocking and too demanding sales targets. A familiar song for Western experts. A survey says that over 40 percent of Chinese car dealers in China make no money. A familiar song for Western experts. Ah, the joys of capitalism!

(Picture courtesy d_j_kingpin @