Overcapacity in Europe is decreasing

Frankfurt. The level of utilization of European automobile plants' capacities continued to rise during the past year.

According to a recent study by PricewaterhouseCoopers (PwC), manufacturers managed to increase the average utilization of production locations to 76.9 percent from 76.1 percent a year earlier.

At the same time total capacities fell to 20.89 million units from 20.99 million units.

"Fourty-seven of the 100 largest plants still used less than 80 percent of their capacity. It is usually at this level that investments start to pay off and profit is made," said Felix Kuhnert, PwC automotive consultant.

PwC forecast a drop in Europe's capacity levels to around 20.8 million units and a further increase of the utilization rate to 77.7 percent in 2004.

The corporation with the lowest level of utilization of its European plants' capacity in 2003 was Mitsubishi (53.7 percent), followed by Fiat (72.0 percent), Ford (73.1 percent) and the VW Group (73.9 percent).

Free capacity at VW

The most unproductive plant in 2003 -- at a scale of more than 100,000 units a year -- was Volkswagen's Hanover plant. It used just about 48.6 percent of its capacity.

Other plants with similarly weak results were the Ford Group's Jaguar X-type plant in Halewood (49.5 percent), PSA's plant in Rennes (54.6 percent) and the Opel plant in Ruesselsheim (55.1 percent).

Another General Motors plant had the best result of all. Due to the big demand for the Meriva compact van the level of capacity utilization rose to 106.3 percent at the Saragossa plant in Spain.

PwC has forecast that by the end of 2004, the Leipzig Porsche plant will move to the top.

Tags: Automakers

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