The European car industry has weakened over the past months, with the
chances of a recovery any time soon looking doubtful. Harsh austerity
measures across the Eurozone have severely impacted the industry,
driving demand down.
The demand for new cars in the 27-member European Union slumped
by 8.2% last year, hitting its lowest level since 1995, Europe's
automotive industry association reported. German new car sales data
showed a slump of more than 10% in February year-on-year. Tightened
consumer incomes, subdued wages and wide-spread austerity measures
across Europe, have driven the sales to rock bottom. Overcapacity
in the region is also a serious issue in the area. General
sentiment is still rather depressing, the president of Renault
Nissan, the world's fourth-largest automaker, Carlos Ghosn told the
media, speaking at the 83rd Geneva Motor Show.
The european market will recover eventually just like everyone else does. They just need to figure out what works for them and go for it. It happens all the time to every country, we all just figure out ways to fix it and try to do our best. It will recover
Why would it recovery? Unless they can produce product that consumers want to consume. That means making items cheaper and better than Asia. What can europe do better and cheaper that Asia cannot do? They have well educated workers as well as masses of low skilled workers who are cheap to employ. Since they are getting salaris they will become consumers in turn boosting their own economies, until such day europeans cost less then Asians to employ or the extra cost results in better productivity (Europians and Asians are both humans so each can do what the other can)
Once Asian salaries become higher than Europian salaries production will come back to Europe and the economy will recovery bit until then it has to keep ging down
OR free trade between unequal partner countries has to stop.
At the moment there are too many uncertainties in the equation for analysts to be able to give a favorable prognosis. The market is fairly shaken and still shows signs of slow, stunted growth. The UK economy is recovering faster, but it doesn't change the overall picture. The uncertainties over the Ukraine and the ISIS crisis dramatically worsen the situation.
Years ago before many modern technological advances in transportation, communication and production, national economies were much more separate and insular things. Many products were grown or manufactured within national borders and international trade, while it existed, was nothing like it is today. Countries were easily separated as developed and developing, first and third world, or whatever nomenclature suits your ethics, very easily. Then the market globalized to a huge extent and very fast. We all started trading together in the same pool rather than staying in our separate pools and occasionally splashing into someone else's. I think what we're seeing with the crashes in the US and European markets is a direct result of this globalization. As the developing economies increased in strength, there had to be an equal and opposite decrease in the developed economies because the fact is there's a finite amount of resources in the world.