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9/22/2019

Topic Reading-Vol.2720-9/22/2019


Dear MEL Topic Readers,
The US auto industry is almost extinct in Europe
In Europe, around 15 million new cars are sold every year. If you look at Europe as a market, it is the third-largest after China’s 28 million and US’s 18 million. Yet, Europe is a big market for an automotive company, it is a very demanding and challenging place to produce or sell cars for non-European car companies. While German premium brands like Mercedes, BMW and Audi are all keeping good brand image, presence and profits in other marketplaces, no US brand has ever achieved a sizable market share or generated meaningful revenues in Europe. Yet they had been there for the sake of global business ambition or presence until they finally found that such ambition was just an illusion and not worth the effort and investment. In fact, European automotive market is very challenging; environmental regulations are much more demanding than the ones in the US, buyers are very price-sensitive, roads are narrow and winding, and parking space isn’t accommodating for large American SUVs or vans. Facing the undeniable reality, US automakers have almost retreated from this sizable yet too demanding market. After all, search engines, music channels, SNSs, and mobile payment platforms are getting more diverse these days. Globalization doesn’t seem to apply to all businesses.
Enjoy reading and think if doing business globally is a good strategy or not.

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