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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