European car makers cut production amid downturn

Financial crisis is forcing auto firms across Europe to reduce output

A number of major car makers are cutting production in Europe in the face of the global financial crisis.

US giant General Motors has shut its Opel factory at Bochum, which makes Astra and Zafira models as well as axles and gearboxes, for two weeks until 13 October.

Another German plant in Eisenach, which makes the new Opel Corsa compact, will halt production from 13 October for three weeks, the company said.

German car makers Mercedes, BMW and Volkswagen have also been forced to cut output in the face of falling demand.

French car auto group PSA Peugeot Citroen is cutting production at its Mulhouse plant, where the Peugeot 206, 308 and Citroen C4 are assembled, for 11 days between the end of October and December.

Meanwhile, in the UK, Japanese auto group Toyota is to go ahead and build the new Avensis at its Burnaston factory near Derby, safeguarding nearly 5,000 jobs at the plant.

But the company, which has already cut one shift at the UK factory, warned that reduced working would continue for the foreseesable future until demand increased.

Automotive analyst Albrecht Denninghoff of BHF-Bank estimated that demand for cars in Europe would plunge 7-10 per cent in the fourth quarter of this year, against the same period last year..

European car makers' association ACEA said passenger car sales in the region fell 15 per cent in August, citing a loss of consumer confidence and the continuing rises in petrol prices.

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