Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: RealMuLan who wrote (20737)	1/7/2005 6:02:51 PM
From: RealMuLan	Read Replies (1) of 116555

Survey warns of capacity issues By John Griffiths in London Published: January 7 2005 02:00 \| Last updated: January 7 2005 02:00 Senior car industry executives will be warned today that they are deluding themselves if they believe the industry's chronic overcapacity is being brought under control. A further 4m units of annual production need to be taken out before overcapacity drops below 20 per cent, according to professional services group KPMG. Describing the overcapacity issue as "the biggest facing the sector", KPMG's annual survey of auto executive attitudes concludes that the responses of a large majority of those questioned were "overly optimistic". "Seventy-five per cent of respondents claim that overcapacity is now less than 20 per cent . . . but we believe the real level is about 25 per cent," said Mike Steventon, head of automotive at KPMG in the UK. The KPMG study indicates that most of the misplaced optimism concerns China. "Although we expect sales to grow in future years, overcapacity will remain an issue for the next decade," the survey concludes. "Even with predicted sales of 3.1m in 2007, that would still mean that less than 60 per cent of capacity will be utilised." While a number of vehicle makers have started to address overcapacity, Mr Steventon said: "It is not yet clear whether these [efforts] will be substantial enough to bring supply and demand back into balance to improve profitability." The survey takes account of restructuring actions already taking place in the industry, such as General Motors shedding 12,000 jobs in Europe, and the expected removal of at least 200,000 units a year from production. The survey also shows optimism over the ability of European manufacturers to increase global market share is on the wane as manufacturers in South Korea and other Asian nations undertake aggressive expansion. news.ft.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next