PARIS, Sept 27: The Paris Motor Show opens with the automobile sector in crisis mode amid deep gloom over the future of the European market, key to the survival of several top manufacturers.

The continent’s debt crisis and the ensuing sluggish growth have wreaked havoc on many automobile manufacturers and the outlook is gloomy for the year ahead. The head of PSA Peugeot Citroen on Thursday forecast zero growth next year in the European market, which accounts for the bulk of its sales, while the head of Renault underscored the need for more competitivity to remain afloat.

“I don’t think one can hope for an upturn next year,” in Europe, said the PSA Peugeot Citroen chief Philippe Varin, adding that growth would be “around zero” or even “slightly negative.” Forecasting an 8.0-per cent decline in the European market this year, Varin said the firm was making huge production losses.

“We have lost 350 euros per car in operational costs,” Varin said, adding:

“Some of our rivals have lost between 500 and 600 euros.” The PSA Peugeot Citroen, the biggest French car maker and second-biggest in Europe after the German Volkswagen group, is set to close a landmark plant north of Paris and shed 8,000 jobs across France.

An expert appointed by the government concluded that the group must restructure urgently and tie up with a global group, saying its crisis was the result strategic errors over two decades, notably in not seizing opportunities offered by globalisation.

Renault chief Carlos Ghosn highlighted a dilemma for manufacturers of mid-level models in Europe, which are squeezed by a growing luxury segment dominated by German manufacturers and Asian firms cutting into their niche with cheaper models produced in Eastern Europe.

“Today, the main subject for us, our main priority is our competitivity in France which is a question of survival,” he said. The US automaker Ford has said it was planning to slash “several hundred” salaried positions from its workforce in Europe but that all the cuts would be voluntary. Ford called the cuts part of an ongoing programme “to achieve greater efficiencies in all areas of the Ford of Europe business in the current business environment.” Ford currently employs about 66,000 workers in Europe, the largest proportion of them in Germany.

All the major automakers operating in Europe have been undertaking staff reductions to cope with the contracting European economy and a sizable production over capacity.

The ACEA European manufacturers association said that new car sales in the EU were down 7.1 per cent for the first eight months of 2012 compared with the same period in 2011. Even Volkswagen, Europe’s biggest carmaker whose launch of the new Golf VII is one of the star turns at the Mondial de l’Automobile 2012, has admitted taking a hit.—AFP