Europe’s deepening economic woes has made the auto market sink for five consecutive years in a row. With economic scenario still looking grim, the auto industry looks like heading for a six consecutive year decline. Auto makers and Government alike are working to put the auto industry (like many other industries) back on track. In the meantime, the number of unprofitable automotive facilities is increasing in Europe.
A recent report by Alix Partners stated that out of 100 largest auto-assembly facilities, 58 facilities in Europe are operating below 75% of their full capacity. A year ago, only 39 European facilities were running 75 percent lower of their real potential. The European auto industry forecast for 2015 and 2016 too look grim and only revival in the economic health; can help increase auto sales in the future.
Even auto majors performing with profit margins too have plants that are functioning below 75% of their capacity. Such as Volkswagen AG, BMW and Mercedes-Benz have few of their manufacturing plants performing below their actual capacity.