Europe set for glut of vehicles

Europe’s car manufacturers will be forced to scale back planned production and investment in new plant, according to a report by consultant KPMG’s European Automotive Practice. It says a 15 million vehicle gap has opened up between the cars manufacturers plan to build in the next three years and the number experts predict will be […]

Europe’s car manufacturers will be forced to scale back planned production and investment in new plant, according to a report by consultant KPMG’s European Automotive Practice.

It says a 15 million vehicle gap has opened up between the cars manufacturers plan to build in the next three years and the number experts predict will be sold.

‘The mismatch between production and sales forecasts cannot be sustained,’ said James Bentley, chairman of KPMG’s automotive practice. ‘These cars will not get built. Many of Europe’s 300 plants are building unwanted vehicles. Europe has too many factories and more are being built.’

The report predicts there will be ten or less major automotive manufacturers in ten years time, and the big system suppliers will get bigger and increase their power.

The reliance on just-in-time production has also created a new business of what the report calls ‘panic logistics’. Europe’s assembly plants are stopped, on average, twenty times a month, because the right parts have not arrived on time. In the UK a £300m business has grown up solely to make last-minute deliveries.