GENEVA -- General Motors German unit Adam Opel does not expect a significant improvement in market volumes or a reduction in pricing pressure in Europe in the medium term, Opel's chief told Reuters on Wednesday.
"Our restructuring program that we initiated for Europe assumes that over the current planning horizon -- which can nowadays be only two, three or maybe five years -- we won't see any appreciable recovery," Chief Executive Hans Demant said.
Speaking at the Geneva car show, Demant said any carmaker that plans its future on the assumption that European conditions will improve would be making "a huge mistake".
"We've gone through this, we've already had the experience," he said in an interview.
"We built up a lot of capacity, we expected the European market would continue to grow. And in the end that was certainly a mistake, and I can tell you its unbelievably difficult to work backwards and say we'll remove capacity."
Opel is currently undergoing yet another restructuring program after years of losses, and aims to cut a total of 10,000 jobs in Germany.
"We are assuming that prices won't improve, but rather more likely deteriorate, that means the pricing pressure will not diminish," Demant said. "There's no reason to believe that this will change since the overcapacities are there, everyone has the same problems, therefore the the pricing pressure will remain."
At the same time, the Opel CEO said long-term market analyses showed that overall car sales would continue to stagnate.
"If you look at the entire continent, including Eastern Europe, there are a couple of brave (analysts) who expect in 2009, 2010 Russia might get out of the hole and there would be a bit of growth. That's what the optimists say, but Western Europe is essentially flat," he said.