European carmakers 'must shut factories'
European carmakers need to close more factories and cut more jobs, executives at the Frankfurt Car Show have said, warning that any recovery in demand was likely to be long and slow as unemployment remained high and bank lending weak.
The bosses of automakers including Volkswagen, PSA Peugeot Citroen and Ford Europe said on the opening day of the biennial event that sales in Europe appeared to be stabilising after five years of decline.
But recovery is not assured and is likely to take years, with the industry still needing to cut capacity to staunch losses at some manufacturers and ease price pressures on all, they added.
Peugeot, which incurred the wrath of French ministers and workers last year by scrapping a major factory and 8,000 jobs, said it would seek more plant cutbacks from unions.
Volkswagen chief Martin Winterkorn said the European industry could do with closing around 10 factories, although he stressed the German carmaker itself did not need to make cuts thanks to strong growth in the US, China and Russia.