°rospects good or the 80s
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:ORDING to the Economist IntelInce Unit the West European 3motive industry — with an output 0 of 1.5m commercial vehicles in 19 — is of enormous economic lificance. It says that vehicle dend and production have made ing recovery from the 1974/75 ission, but as the sector enters the Os new problems and opportunare becoming evident.
he EIU Special Report (No 77) just lished (E60) examines the industry's ;pects. The main findings are that arnments will continue to have a major ience on the automotive industry's irs. In particular, the provision of .irnment finance and inducements will strong — perhaps decisive — factor in mining the location of motor industry stment throughout the 1980s. As the ;Os progress, exporting built-up cies from Western Europe to other Dns will become increasingly tougher. he report says that West European cle manufacturers' commitment in the -narket will grow, so that by the midOs there could well be quite a network iropean company operations in North irica
roduct change is expected to be ..;:ted primarily towards energy conser)n, but in Western Europe there is no ;eeable alternative to road transport le principal mode for the movement of )le and freight — nor is there likely to ne in the long term. Although the cost lel is expected to rise during the next
five to 10 years, a variety of compensating factors will operate in a way which does not alter the underlying pattern of vehicle demand and production which has been evident in Western Europe since the postwar economic recovery say EIU.
Commercial vehicle demand in Western Europe is expected to decline in 1980 and 1981, but 1 985 is forecast to witness a new high of 1.3mm units. The commercial vehicle prospects of maintaining the existing net export position are good.
Vehicle production is expected to follow a similar pattern to domestic demand, with declines in 1980 and 1981, but new highs are expected in the commercial vehicle sector in 1985.
Ford's European operations are currently clouded by the parent company's problems in North America. However, it is believed that these will not materially affect long term prospects.
General Motors is set for a period of significant expansion in Western Europe and Leyland Vehicles' underlying potential for recovery is good. The biggest challenge facing management is not lack of. finance but the attitude and cooperation of the workforce, says the report.
The automotive components sector can look forward to an exciting and challenging decade. Companies which develop a global dimension will be especially well placed — the more so if backed by a strong commitment to technical innovation.