Assume you could build a company based on thousands of high-end luxury items a year. With billions in revenue. Things that people strive to own and want everyone else to know they own. Items that are truly different, setting your brand and their owner apart. Would you then aspire to make it a volume marque, or would you work to maintain its cache and meaning? Just wondering…
Since no one really knows, I thought I’d put out my forecast for EU 2012 light vehicle sales. As we comp against French incentives and other markets facing ongoing austerity, I foresee the potential for a EU down 5%. Not a fait accomplis, but at this moment, I prefer prudence.
The trick is in the mix. With macro uncertainty, I leave Germany and neighbors flat, and contrary to many who feel the Latin markets have bottomed, I see continued decline in France, Spain and Italy. UK exit rates for 2011 were concerning, and the best description I heard from OEM’s is “a mess, but it could be worse,” so:
What’s this mean: It’s about exports, where the Germans and Renualt have the edge. Impact from falling euro should be supportive. Also, see my recent note on downsizing which continues in Europe as well. New technology on gas engines and diesel pulling back. VAG still needs a way to sell more small cars.
With so much happening in Brazil, I thought I try to sum it all up. The main theme isincreased localization for two reasons. Capture some of the meteoric rise in the market and avoid recent tariff increases.