Wednesday, September 4, 2013

European Automobile Sales and effects on Demand Uncertainty

After reading "From the Master of Speed Comes a Lean, Green City Car", I was curious why Gordon Murray Design did not plan on selling the T.25 or T.27 in the United States. I decided to focus on what made the European market a unique. 

According to the European Automobile Manufacturers’ Association (ACEA) registrations for automobile manufacturers Peugeot, Renault, Fiat and GM fell to 1.08 million vehicles from 1.15 million a year earlier. Joblessness in 17 countries using the euro led to unemployment reaching 12.2 percent in April. Closing shop in these markets may do more harm than good, so understanding and accounting for changes in demand are critical to maintaining levels in production that will not only continue success, but avoid derailing your supply chain. In addition to demand uncertainty, there may be other environmental factors that limit your ability to effectively develop and maintain your strategy. According to 24-hour news publication The Daily Caller, "the European Union has announced plans to forcibly limit all cars to a maximum of 70 miles per hour." This could help Gordon Murray Design because of the fact that the two new vehicles both have top speeds below 100 miles per hour, which may appeal to buyers under this new restriction. There has been some governmental pushback from countries within the EU, but this would have serious implications for the sales market in Europe. 

Based on my limited research, it appears that there are similar economic and political drivers affecting the automobile sales in both Europe and the United States. In my experience, smaller cars work better in the winding streets of Europe, and being a European based company it makes logistical sense. Perhaps further research will shed more light on their decision. 

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