Why is there a sour note at the Paris Motor Show? 0

The Paris Motor Show has been and is supposed to be one of the biggest feel good events of the motor industry. For the first time there is a sense of gloom and worry in Paris.

The state of the French and overall European is in great decline. Companies such as Renault, Peugeot and Vauxhall have been forced to rethink strategies cutting jobs and shutting down plants. The problem is that there are more cars being produced than what there is being demanded.

The problem was long predicted back in 2008. Renault Nissan boss Carlos Ghosn said that car manufacturers would see no one buying new cars in the near future and that the collapse of the Lehman Brothers would see a Domino effect on all other institutions, hence the banks not lending out any sort of money in Europe. The Government were also reluctant to help out the motor industry in France as they could see it crippling and couldn’t justify doing so.

That was four years ago. Sadly nothing much has improved. The worse thing about the situation is that next year, the European car industry will not improve by much. European overcapacity as they call it is still ranging from 30 to 40 per cent. How can the problem be solved? Customers need to purchase new cars. These European car companies need cash flow and a healthy one to prevent jobs being lost.

The UK is no stranger to taking a bullet or two for the European car market industry. Although these French car firms have been hit really hard, it is somewhat difficult to feel sorry for them. Renault closed down their Belgian plant and Peugeot closed down their Coventry plant.

France’s general economy woes are unbearable to even hear. Their economy is running flat with no current room for growth it would appear. Unemployment is up and France’s public spending is the second highest in the whole of Europe. Renault and Peugeot are desperate to get rid of even more jobs too. That will prove to be a difficult task in itself.

It is no wonder that the Paris Motor Show has not been taken too as expected. The bad mood surrounding the event will hopefully not take too much away from some of the spectacular cars that will be released here and in Europe.