Everybody Won in Europe Last Month, Except Ford and GM
Europe has been a particularly tricky region for the world’s automakers of late, but none more so than American manufacturers. The proof was in the pudding last month, when both General Motors and Ford, who had been experiencing some level of success across the Atlantic, both saw a setback in terms of sales numbers.
How ugly was it? Sales numbers for GM’s Opel Group were down almost 12% from a year ago, and the company overall lost 1% of total market share. Overall, GM has sold 4.2% less cars for the year as a whole, as Investor’s Business Daily reports. Ford’s November was also painful, with a drop of 5.3% from a year ago, and a market share loss of 0.5%. The difference is that Ford, for 2014 overall, is still ahead, having sold nearly 6% more cars than during 2013.
On the flip side, other car companies experienced varying levels of success on European soil during November. Total car sales actually increased 1.4%, indicating that consumers weren’t abandoning the prospect of buying a new vehicle — they were just turning away from America’s big two manufacturers. In contrast to GM and Ford’s numbers, Volkswagen’s market share increased modestly by 0.2%, and Toyota even saw sales increase year-over-year by 4.2%.
Still, there were some markets that saw declines in total sales. For example, Germany — Europe’s biggest market in terms of sales — saw sales numbers decline by 1.8%, and France saw a dip of 2.7%. As far as positive turns, the United Kingdom saw a spike of 8%, while other countries, like Spain and Portugal (albeit small markets), saw fairly big increases. In all, there have been 11.6 million vehicles sold in Europe for 2014 to date, which is a 5.7% increase over 2013. If that trend continues through December, it will be the first time car sales have increased in Europe since before the recession.
From Ford and GM’s perspective, the newest European sales reports are definitely a let down. Both manufacturers have been pushing hard and putting significant resources behind efforts to boost sales internationally, including Europe. Of course, Europe has long-been a pit of quicksand, in a manner of thinking, for American companies, but Ford had seen some success earlier this year. What, exactly, has turned things around, is unclear.
Again, Ford sales for the year are up by a good amount, indicating that the company’s overall strategy is paying off. The downturn last month may not be a reason to panic for the company’s higher-ups, but it is something to keep an eye on. Despite the recent rough news out of Europe, it seems that analysts are still feeling positive about the company’s short and long-term growth. The Street, a stock analysis and commentary site, has even said that investors should keep their faith in the automaker. “The company’s strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity,” they write. “We feel these strengths outweigh the fact that the company has had sub par growth in net income.”
GM, on the other hand, has seen continuing struggles across the pond. But GM, as we all remember, has had one hell of an interesting year. Following an avalanche of recalls starting in January, the company has since had a wild ride over the past 11 months, and has even seemingly turned things around. But still, success in Europe has remained elusive.
Will December see a turnaround for America’s big car manufacturers across the pond? November was ugly, but it wasn’t catastrophic. Perhaps consumers were holding out for the new 2015 models to hit dealerships? And with oil prices continuing to plummet, perhaps consumer interest in vehicle ownership will spike? It’s all unclear right now, but it does set up an interesting end to 2015.
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