The French car manufacturer, Peugeot Citroen, announced losses of 5bn Euros which the BBC reported yesterday. A stark contrast to the half a billion profit in 2011, the car manufacturer believes that the continuing economic problems across Europe, together with a lack of demand for new cars is causing these poor results. While Peugeot Citroen have already instigated over 1bn Euros of cost cutting measures, it seems that even that has not been enough to avoid the ensuing financial problems.
Like many car manufacturers, the lack of demand for new vehicles across France, Spain and Germany, is creating a very difficult situation for company finances. In contrast, demand across the UK has been fairly consistent and the result of this has been a number of strong deals for new cars; not just in terms of car leasing but through other platforms such as direct car sales. In particular, brands such as Peugeot Citroen, Seat and even Mercedes, are pushing their presence across the UK, as they compete for a slice of our business.
From our perspective at CarLease UK, it is of course worrying, although not altogether unexpected, that car manufacturers across Europe are beginning to experience financial losses amidst the Eurozone situation. For the foreseeable future these financial hardships will continue until Europe establishes a stability so that confidence throughout the market can resurge. New cars are, for the most part, a luxury item and it is makes the results unsurprising.
However, as we discussed above, for the UK this will mean a continued influx of new cars from the European continent and a number of incredible deals. The harsh reality is that another country’s negative can indeed be a big positive for us. Until Europe begins to recover, we will probably see more and more deals.