Auto Sector Is A Global Affair
While the US auto market year-over-year sales were up 10.6 percent last month on the strength of easy credit and new model introductions, the global market is increasingly where industry news is made.
In Europe, auto sales are at a 20-year low! Undercut by a sustained recessionary downturn and tumult within the European Union the slump in car sales threatens to deepen the continent’s economic woes as Ford announced the closing of its sprawling factory in Genk Belgium putting 4,300 people out of work. The idled plant in Belgium used to produce top selling European Fords, as well as Volvos and Mazdas.
Other carmakers in Europe are feeling the pressure as many auto factories operate at barely 60 percent of capacity. But the strength of the unions and pressure from national governments makes closing auto plants costly. Ford estimates the shutdown of the Genk factory and two other plants in the UK has cost over a $1 billion in severance payments.
Meanwhile car sales continue to grow in China, where for the first time last month Volkswagen beat General Motors in the top foreign car sales tally.
This George Polgar of GT Marketing for KYW News Radio.