Emerging from the crisis

Overcapacity was already a global industry issue pre-crises, especially in Europe and North America, where many OEMs struggled to make money even in a buoyant market. In the European Union capacity was dealt with by shift reductions, temporary closures and shorter working hours but there were no major structural capacity reductions. The situation was dramatically different in North America where significant reduction in capacity and legacy costs were made. In Japan, automakers were better able to weather the crisis but, like in Europe, few structural changes were made.

The debt accrued during the crisis is an issue that could weigh upon economic recovery for a number of years in many mature markets and this could dampen the rate of vehicle recovery that many OEMs are relying upon. However, generally the prognosis is the worst is past and the industry is in recover mode with the recovery process in mature markets less rapid.

While stronger growth is expected in Brasil, Russia, China, and India, and other emerging markets, in China growth will not be as rapid it has been for the past 18 months.

How PwC can help you

The PwC global automotive network has more than 1,500 skilled professionals that provide guidance, offer analysis, and deliver solutions to firms across the entire automotive industry value chain. Every day these professionals help companies emerging from the auto crisis by delivering various services including: