European mass car makers' luxury challenge looks doomed | The Detroit NewsEurope’s tentative recovery after reaching 20-year car sales lows ought to promise hope for ravaged bottom lines, but some mass manufacturers seem determined to jeopardize their already rocky finances by reverting to tried and tested ways of losing money.
Instead of just slashing excess capacity, cutting costs, and facing up to the threat from Korean manufacturers Kia and Hyundai by producing handsome cars which sell on their merits with cast-in-concrete guarantees, many of Europe’s loss makers are opting for a delusional and well-traveled dead-end street. They are trying to maximize profit margins by moving upmarket into German luxury territory now owned by the likes of BMW, VW’s Audi and Mercedes-Benz.
This is a well-documented direction if you seriously want to lose lots of money...
Moody’s Investors Service, in a recent report, said four of Europe’s biggest car makers — Ford Europe, GM Europe’s Opel Vauxhall, Fiat-Chrysler and Peugeot-Citroen — are expected to lose a combined $6.6 billion this year, about the same as in 2012.
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