In case you missed it. There is some interesting article on WSJ web site, “Europeans Raise Pressure on Detroit”. According to the source US auto makers will face new stronger competition from European car manufacturers.
While US companies shorten production and facing cash flow troubles Volkswagen AG (further VW) and BMW AG are preparing the expansion of their US market share withing few years.
US small vehicle market historically is dominated by US and Asian auto makers. Autodata’s research from 2001 shows steady decline of US manufactures share and Asians and Europeans shares are steadily increasing.
VW is building their first US factory since they close their previous one in July of 1988 due to some quality problems and high cost of production with unionized labor.
This time VW is betting on non union workers. They plan to introduce several new models specifically designed for US market. VW get its optimism from other markets. For example VW has bigger market share in China than Toyota has. I would attributed that to centuries old tension between China and Japan so Chinese do not like to buy anything made in Japan in my opinion. New US factory is going to open in 2012 with production of 250000 cars a year. VW’s luxury unit Audi is also planning to increase its marketing spending. So we are going to see more Audi ads including on Super Bowl.
BMW is also planning to increase its market share by introducing more One series cars and by selling more of their Mini cars. Although BWD has already increased prices for most of 2009 models. So unless hyperinflation really hits the US as most classic economics law suggests. It is going to a little harder for them to compete on price level with other manufacturers when they start to clean up stock.