By on October 29, 2013

Audi_A1_1.6_TDI_Ambition_–_Frontansicht,_17._März_2012,_Düsseldorf

A bit of bad news from the Continent: Audi CEO Rupert Stadler is cautioning that Western Europe’s auto market will not recover before the end of the decade.

Stadler’s comments came at a conference of automotive executives, and were far bleaker than previous projections. Europe is still burdened with significant overcapacity, with factories capable of producing 26 million vehicles a year, or 7 million more than necessary. Matching supply with demand would require 18 plants to be closed across Europe, resulting in massive job losses. Shutting car factories is a politically untenable situation in many countries due to their economic significance.

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12 Comments on “Audi CEO: Don’t Count On Quick European Recovery...”


  • avatar
    CoreyDL

    That Audi looks quite cheap with the grey pillars. I’m glad they don’t look like that here in the US.

    This article goes against the big proclamation article from the other day on here, “Euro slump over, September sales show improvement,” or whatever that drivel was titled.

  • avatar
    ash78

    They should temporarily shift to a more US-style system: Fewer model variants at a lower price. Reduce the customization and bring the sticker prices down 10%+. Once the economy recovers, move back to the traditional model.

    Europeans pay a good bit more for their cars (as a percentage of income) than Americans, and that’s a large part of it. Obviously VAT is another major element, which would require some concessions from the taxing authorities, but a more inventory-based distribution model (vs customized) might alleviate the numbers a bit.

    I’ve always been amazed — and a bit envious — about how US version might only have 5-10 possible combinations of configurations, while Europeans might have up to 100+ for the same car. That variety isn’t cheap.

    • 0 avatar
      Pch101

      The car market in Germany generally, and the luxury car market in particular, is dominated by corporate leases that serve as tax avoidance tools for the workers.

      One reason that car prices are high there is due to the dominance of leasing. A government move to increase the leasing benefit might be more effective.

  • avatar
    racer-esq.

    Europe is a bunch of old people with jobs that they can never be fired from, with massive pensions, parasitically attacking any young person willing to work. With young people forced into contract jobs because nobody in Europe is going to be stupid enough to hire new workers full time when full time workers can never be fired or laid-off. And those that can find work are undermined by regressive VAT taxes. No wonder young people tune out and become anarchists. Europe has the bad traits of the US (way too many redundant people overpaid to work for the government, if they are lucky enough to be more equal pigs), but magnified.

    Europe needs to liberalize (in the classic sense) its economies if it wants to compete. No impediments to firing or laying off workers, right to work statutes, defined contribution retirement, not defined benefits. Despite being a wealthy, high wage country the US is a manufacturing powerhouse because of its liberal (in the classic sense) economic policies.

    • 0 avatar
      Onus

      My hope you are being sarcastic.

      Take for example Germany. High cost but, it has a positive trade balance it exports more than it imports. Unlike this wonderful country. We may make tons of things but look at what your buy in the store. “Made in China”

      VAT is a consumption tax. You use more you pay more. It’s created to target rich people. Its no different than a hidden sales tax.

      Same with fuel tax and such. It’s to encourage the use and to subsidize public transportation.

      Seems fair to me. Unless your rich and in that case you have the money to pay for all that stuff anyway.

      • 0 avatar
        racer-esq.

        I hope you are being sarcastic. Both VAT and fuel taxes are regressive, and harm poor people more than rich people. Poor people “use” more of their income than rich people.

        Simple math:

        10% VAT tax. A poor person makes 30,000 Euros a year, and spends 30,000 Euros a year. They pay 3,000 Euros in VAT. 10% of their income. A rich person makes $1 million Euros a year and spends 100,000 Euros a year. They pay 10,000 Euros in VAT. 1% of their income. VAT taxes hurt the poor much more than the rich.

        Germany is an anomaly, certain US states would be the same. And even Germany is rapidly exporting jobs to either more liberalized or lower cost countries, e.g. the US Mercedes, BMW and VW plants, or Mercedes making the CLA in Hungary.

    • 0 avatar
      RobertRyan

      “manufacturing powerhouse” agree with Onus’s comments.


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