Carmakers are canceling or postponing planned new cars because of the economic downturn.
Renault, Opel and BMW are among car companies stopping or delaying planned new models due to difficult economic conditions.
– Renault has stopped work on a Megane-based crossover. It will delay the replacement of the Espace large minivan and a new top-of-the-line range to replace the Vel Satis.
– General Motors Europe has put a planned range-topping car for its Opel and Vauxhall brands on hold and may not build an Opel small SUV that was supposed to be made at its Antwerp, Belgium, factory.
– BMW has axed its planned X7 premium SUV. The model was to be aimed at rivals such as the Land Rover Range Rover.
Industry insiders also say Volvo has stopped work on new variants of its C30 hatchback and Fiat could reduce its model development program to meet tough financial targets.
New products are a key sales driver for automakers and analysts warn that cutting back or delaying new models could hit companies’ long-term sales.
This year, Toyota has seen its sales in Europe decline because it lacks new models. The carmaker’s European sales fell 12.3 percent to 444,822 units in the first half, according to ACEA. Last year, Renault CEO Carlos Ghosn blamed falling sales on a product trough.
Jürgen Pieper, an analyst at Germany’s Bankhaus Metzler bank, said: “Customers in Europe expect new models to be rolled out regularly. That’s why Europe has the broadest product spread in the industry.”
Said Ferdinand Dudenhöffer, head of the Center for Automotive Research in Germany: “If carmakers reduce product development, they will improve profitability for only a short time before customers demand more new products.”
Besides saving on product development, some European carmakers are cutting production and revising down their unit sales and profit forecasts for 2008.
BMW CEO Norbert Reithofer said the premium carmaker likely will cut production by 20,000 to 25,000 cars this year.
Daimler will lower car production by 45,000 units in its German and US plants by the end of the year.
Renault is cutting 5,000 jobs and lowering production at its Sandouville, France, plant to one shift from two because of slow demand for the upper-medium Laguna.
The automaker says it also may need to adjust production levels for cars made at its Flins, France, plant. Flins makes the Twingo minicar and Clio small car.
Toyota said August 8 it was slowing production at plants in England and Turkey and it will lay off contract workers to cope with weakening demand in Europe.
Toyota also cut its 2008 European sales target to 1.19 million units from 1.27 million.
GM Vice Chairman Bob Lutz and GM Europe Vice President Hans Demant both told Germany’s auto motor und sport magazine that Opel’s planned flagship above the Insignia upper-medium car is no longer a priority.
GM Europe had hoped to launch the car in 2010.