THE GUARDIAN, By Simon Beavis
European car sales could slump by up to 10 per cent this year denting hopes of recovery for UK manufacturers including the loss making Rover, its chairman George Simpson, said yesterday. Speaking after British Aerospace directors ruled out the sale of Rover, which it will be free to do from August, Mr Simpson said that UK car sales would show only modest growth in 1993 rising from last years 1.59 million to around 1.65 million.
But this would be offset by the recession, particularly in Germany and France. Rover reported operating losses of Â£49 million last year compared with a Â£52 million deficit in 1991. The car operation was particularly heavilly hit but the overall loss was contained thanks to a powerful year by Land Rover which had record sales. Rover had reduced its break-even point to 440,000 vehicles in 1992, from some 490,000, but it made 405,000 cars and sold 420,000 in the year.
The target for the current year was 400,000 although the group expressed doubts of meeting it. European car sales totalled 13.5 million in 1992 but in a number of key markets slumped heavilly in January. Mr Simpson also warned that proposals from the Clinton Administration to increase import duties on four wheel drive vehicles from 2.5 to 25 per cent would push up the price of a Land Rover by $7000 and hurt sales.