Big Three Auto Makers Speed Into Europe
Teetering trade barriers in the West and the opening of closed economies in the East have been making Europe as a whole the target of U.S. auto makers, which are moving with unaccustomed speed to exploit the market.
General Motors Corp., Ford Motor Co. and to a lesser extent Chrysler Corp. have done business in Europe for years.
But more recently they quickly have been setting up joint manufacturing and supply ventures, establishing marketing associations and buying all or portions of European auto makers as the Continent begins to emerge as the world’s largest auto market.
Trade barriers among the 12-member European Economic Community are to be eliminated in 1992, creating an auto market larger than North America.
The market would swell further if free trade agreements are reached between the dozen EC members and other Western and Eastern European nations.
General Motors, Ford and Chrysler, each facing weakening performances at home, increasingly are looking to Europe as a source of profits and a market for excess U.S. manufacturing capacity.
Auto analyst David Healy, of the investment banking firm Barclays de Zoete Wedd in New York, said Tuesday that he expected the European market to grow to about 13 million cars this year. Generous estimates put the U.S. car market at about 10 million for 1990.
“It’s something that’s a good deal bigger in just passenger cars than the United States,” Healy said. “Sales have grown a lot over the last few years, but have sort of leveled out this year.”
There’s potential growth in the European minivan and sport-utility segments.
Chrysler, which sparked the popularity of minivans in the United States, has signed an agreement with Steyr-Daimler-Puch to make minivans in Austria beginning in spring 1991. Executives have said the project also may market right-hand drive vehicles for the United Kingdom.
“I think there is going to be a scramble to either introduce those vans from the United States or companies building them on their own,” Healy said.
