Carmakers In Europe Expanding Their Global Sights

Just two short years ago, the worldwide financial crisis nearly destroyed European automakers. They are back with a vengeance, ready to compete in the global market. Fiat is creating a worldwide brand and Volkswagen wants to lead the industry.

Auto manufacturers in Europe issued a positive outlook for the remaining of 2011.

Volkswagen reported that its profits jumped three-fold between January and March 2011, reaching 1.71 billion euros. The largest automaker in Europe sold two million cars during this period, a new milestone. The German company plans to jump ahead of Toyota and General Motors to become the leading carmaker in the world by the year 2018.

Increasing demand from China enabled Daimler to experience an excellent first quarter net profit, with an increase from 612 million to 1.18 billion euros from first quarter 2010 to first quarter 2011. The new Chinese middle class purchased Mercedes-Benz automobiles, while the automaker’s heavy trucks were used for new construction projects.

Perhaps most notable was the $1.3 billion deal that increased Fiat’s stake in Chrysler from 30 to 46 percent. After Chrysler came out of bankruptcy in 2009, Fiat began managing it. Fiat provided Chrysler

with technology for small cars and Chrysler exposed the Italian automaker to dealership networks in the U.S. and other areas where Fiat did not have a presence. Chief Sergio Marchionne is even considering moving the headquarters of Fiat from Italy to Detroit.

Everything is not positive, though, as the disasters in Japan have led to critical component shortages. Volvo and Peugeot-Citroen are decreasing production in Europe and the U.S. China is presenting stiffer competition for European automakers.

Chinese automaker SAIC recently launched the first Baojun brand model, allowing Chinese consumers to take out car loans for a vehicle whose intellectual property is co-owned by SAIC, Wuling Motors, and GM.