Europe might have a huge €500 billion trust fund and a plan now, but is little indication that consumer confidence will return any time soon. A numbers of automkers have already cut their sales estimates for this year, as a tougher Q4 is forecast ahead, and next year looks to be flat at best.
Among the hardest hit have been France’s Peugeot, who have announced severe job cuts, and Italy’s Fiat. As the second largest automaker in Europe, PSA can’t even manage to keep to its original estimates when it comes to the brand new and relatively affordable 208 supermini.
Today, rating agency Moody’s has reduced PSA Peugeot-Citroen and Fiat Group to three levels below investment grade. This will have an impact on both companies’ borrowing capabilities.
Moody’s said that PSA’s current strategy to stop the capital bleeding by 2014 "may not be sufficient" mainly because demand in Europe is expected to fall another 3 percent.
Fiat on the other hand is hurt by its dependence on the local Italian market, which is now also reeling from one of the worst unemployment levels in Europe.
Story via Autonews