Marchionne says European car market has not bottomed out
TURIN - The European car market has not yet reached the bottom of its slump, Fiat CEO Sergio Marchionne said.
Marchionne said the latest forecasts for car demand in Europe did not exceed 12.5 million units, which he said was the second lowest level in the past 20 years.
"The European car market is a disaster. It has plunged off a precipice that doesn't seem to have bottomed out yet. The prospects are anything but rosy," Marchionne said at an industrial conference on Monday.
Last week, Moody's ratings agency said it expects that light-vehicle demand in western Europe will decline by 3 percent next year with demand continuing to fall heavily in weak southern European markets such as Italy. In January, Moody's had forecast 3 percent growth for the region.
Standard & Poor's said western Europe's car market is set to decline by as much as 7 percent this year and grow by just 0.4 percent next year.
The slump is putting pressure on PSA/Peugeot-Citroen, Fiat and Renault, whose ratings are all in the speculative-grade category, Standard & Poor's said.
Weak demand as austerity measures hit consumers along with fierce price competition and high costs are hitting automakers, the agency said.
Reuters contributed to this report