Challenges Ahead for Automakers in Europe

The slowing economy has been an obstacle for every automaker. For General Motors (NYSE:GM) and Ford (NYSE:F), Europe in particular is a sore spot. The U.S. automakers posted strong numbers in August at home and in China, but face difficult decisions in the euro zone.

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Ford has lost over $500 million in Europe so far, and expects to lose over $1 billion by the end of the year. As part of restructuring meant to curb these losses, Ford will be closing a factory in Belgium. GM could also be closing a plant in Germany, as it tries to compensate for its European losses of over $600 million. Labor laws in Europe make it difficult for plant closures, but with facilities operating at less than 70 percent of capacity, there may be no other option.

On a more positive note, India-based Tata Motors (NYSE:TTM) ended the week 13 percent higher in anticipation of its fourth-generation Range Rover. The new vehicle is expected to see strong sales volume in 2014. Karl Slym, the former President of General Motors India, has also joined the company as managing director ahead of schedule.

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