Sun, Sep 08, 2013 - Page 14 News List

Carmakers hope to attract young with technology

By Jack Ewing  /  NY Times News Service, FRANKFURT, Germany

“What the mobile phone did for communication, electric mobility will do for individual mobility,” BMW chief executive said during an introduction event for the i3 in New York in July.

RUNNING ON BATTERIES

Despite Reithofer’s enthusiasm, no one expects battery-powered cars to sell in large numbers soon, and certainly not to solve the industry’s deep-seated problems. About 77,000 electric vehicles were sold in the US during the past 12 months, far more than any other country, Roland Berger Strategy Consultants in Munich said. That number, which includes cars like the Chevy Volt that have range-extender motors, is tiny compared with a total 14.5 million cars sold in the US last year.

European carmakers have also been cutting costs and deal with factories that are operating well below capacity. Underused factories are ruinous for carmakers because many operating costs remain the same no matter how many cars a plant produces. In Italy, home of Fiat, factories are producing only 40 percent as many vehicles as they could, estimates by the Organisation for Economic Co-operation and Development show.

European carmakers have been shutting down plants or sometimes idling them temporarily to avoid the political outcry that accompanies a plant closure. General Motors, which makes Opel cars in Europe and is planning to stop producing cars at a plant in Bochum, Germany, reduced its loss on the Continent to US$100 million in the second quarter from US$400 million a year earlier.

PSA Peugeot Citroen, which may be the most troubled big carmaker in Europe, cut its loss for the first half of this year to 510 million euros (US$672 million) from 657 million euros a year earlier, in part by laying off some workers.

Overall, the European car market may be close to its nadir, IHS Automotive analyst Tim Urquhart said.

“In the medium term, it will stabilize and then bump along the bottom for a bit,” he said, adding: “Everyone is asking me when are we going to get back to precrisis levels. It’s going to be a long time.”

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