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Europe auto industry faces challenges ahead: firm

PARIS--As many as 10 car factories in Western Europe could close in the few years, leaving up to 80,000 people out of work, a German consulting firm said Wednesday.

The firm Roland Berger pointed to low demand, and production sites running below capacity, to make the case that between five and 10 plants could close, according to its report based on a study it conducted in July.

“Apart from Volkswagen and Ford, other manufacturers are posting productivity rates in their plants that are unsustainable and the market will not recover,” Roland Berger consultant Max Blanchet told AFP.

He was referring to the carmakers General Motors, Opel, PSA Peugeot Citroen, Renault and Fiat.

He cited the economic crisis as a contributing factor, but added that the main explanation was that “the number of kilometers travelled tends to drop because of the cost of fuel, so people hold onto their cars longer.”

Blanchet said he expected the plants to close within two or three years.

The report said the mid-range segment of the industry in particular reflected this slump, while low-cost models were actually up in sales since 2007, and luxury models were down but not to the same extent.

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