|European Carmakers Try To Turn The Corner|
|Subject||Product and Cost Curves and Profits|
|Topic||Production and Costs|
|Key Words||Sales, Prices, Profits, Cost-Cutting, Efficiency, Consumer, Demand, Production|
European car sales in 1999 are expected to be slightly below the 14.3 million of 1998. In addition, car prices are expected to decline for the first time on a year-over-year basis. Therefore, the challenge for carmakers is how to keep profits up.
Cost-cutting is one strategy. GM Europe is going to raise the efficiency of its Russelsheim, Germany, manufacturing complex through modular assembly techniques. Daimler-Chrysler is separating the assembly lines for its Mercedes cars so that the models can be built in much shorter time periods.
Also, auto producers are trying to design cars that have the customer in mind. Ford's engineers receive various consumer data, such as demographics and preferences, which help inform their designers. Finally, some models, like the Opel (GM) Zafira (a mini-minivan), already have pent-up demand and there are plans to increase production.
(Updated May 1, 1999)
|Source||Micheline Maynard, "Carmakers try to keep European sales hot", USA Today, March 22, 1999.|
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