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Few sectors resemble Europe's economic malaise as closely as car manufacturers. Struggling with mounting losses, French automaker ...
PSA Peugeot Citroen has announced 8,000 jobs cuts and the closure of
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Few sectors resemble Europe's economic malaise as closely as car manufacturers. Struggling with mounting losses, French automaker PSA Peugeot Citroen has announced 8,000 jobs cuts and the closure of this plant at Aulnay, near Paris, in 2014. The unions aren't impressed but Chief Executive Philippe Varin said he had no choice. (SOUNDBITE) (French) PEUGEOT CHIEF EXECUTIVE PHILIPPE VARIN SAYING: "The group is facing a new situation on the European market - it's lost a quarter of its volume over the past five years, especially this year. This is a long-term trend and we therefore have to take steps as it is creating an overcapacity in our plants. Over the last year it has cost us 200 million euros every month." European automakers have struggled since the financial crisis began. Many are laden with over-capacity and anaemic demand. Even government subsidies aren't proving sufficient, as Peugeot can testify. Autos analyst Andrew Jackson says the company's exposure to peripheral European economies is a large part of the problem. (SOUNDBITE) (English) DATAMONITOR SENIOR AUTOS ANALYST, ANDREW JACKSON, SAYING: "There is a certain level of perhaps being too much into certain economies, but also it's the type of product mix that they have, which is small vehicles and, certainly for the economies that they are exposed in, these are reducing in popularity." Some European automakers are finding a way to weather the storm. Volkswagen has tapped into emerging markets in Asia and Latin America. But others haven't been so successful and jobs cuts across the sector are expected. (SOUNDBITE) (English) DATAMONITOR HEAD OF AUTOMOTIVE ANALYSIS, ANDREW JACKSON, SAYING: "There are a number out there which have for a while been trying to ensure that their overcapacity and also their manufacturing is sustained and I think this certainly could be a point in time at which this pushes other manufacturers even closer towards making other very similar decisions." French President Francois Hollande ran part of his election campaign on promises to revive the country's industrial production. The government has said a state support plan for the auto industry would be produced by July 25. But with dwindling resources and weak consumer demand, the sector may finally be running out of gas. Joel Flynn, Reuters.