Skip to main content

Fiat and PSA predicted to be Europe's biggest losers in 2013

Posted Jan 17th 2013 10:45AM

CommentsAdd


Industry observers are expecting Europe's new vehicle sales to fall to lows not seen in decades, with Fiat and PSA/Peugeot-Citroën sitting in the lead car of the plummeting coaster. Both of those automakers traditionally count on the southern part of the continent for sales, yet consumers in that region have slowed spending due to the financial crisis.

Compounding the problem for Fiat is a lack of new product, as CEO Sergio Marchionne has stalled development to conserve cash during the downturn. PSA has invested in new vehicles, but aggressive price wars have forced it to sell its product with steep discounts. Making matters even more difficult, both companies may have their credit ratings cut this year. That would raise borrowing costs and only deepen the wounds.

The news isn't just bad for Fiat and PSA. Analysts are predicting that volume automakers in Europe lost 8 billion euros (about CAD$10.52 billion in today's rates) overall in 2012, and they won't break even until mid-decade.

2013 Fiat 500e at the 2012 LA Auto Show

FOLLOW AUTOBLOG CANADA

Follow us on Facebook

Get updates from Autoblog Canada posted directly to your News Feed.

Add a Comment

*0 / 3000 Character Maximum