Is It Too Early to Call European Bottom?

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July 8 (Bloomberg) -- Edmunds.com Senior Analyst Michelle Krebs discusses the European auto markets with Erik Schatzker on Bloomberg Television's "Market Makers." (Source: Bloomberg)

With us to talk about it is the senior analyst at edmonds .com.

Everyone wants to call a bottom in europe.

Is it too early?

It may be.

We are certainly seeing conflicting reports come.

The mere fact that there are two different points of view make me think that nobody really knows more the bottom is.

If that is the case, gm has said on a number of occasions in the past few months, it wants to break even in europe by the middle of the decade.

If you cannot call the bottom, how could gm get there?

Is a good question.

Let us remember, they have been calling this a number of times, for breakeven, and it has not happened.

And they say mid decade.

That is not really clear on exactly what that date will be.

With an uncertain outlook for demand, some of these automakers have had to rethink their european operations.

Where are the opportunities right now, in china, with the emerging consumer, or in the united states?

China has been a bumpy ride as well.

Long-term everybody agrees that it is the place to be.

It is interesting, we have europe and the u.s., the u.s. on the upswing, the victory doing very well here.

Last month we flirted with a 16 million number, and we have not seen that since 2007. we do not see that letting up.

There is a lot of pent-up demand.

Performance like this certainly covers up a lot of problems.

Our general motors and ford, with the legacy operations in europe, doing enough with the things they can control, versus what they cannot control, like the economy and consumer demand?

There is also the capacity issue to deal with.

In the u.s., we dealt with it, it was painful, but it is over with.

That has not been taken out of the system in europe.

There is a reluctance to do so.

No country wants to lose a car plant.

There are plans to do that, but it is taking a lot longer to get those plans into place.

Are you talking about a restructuring of the industry, like what we saw during the crisis in detroit?

Absolutely.

There has been too much inventory in europe.

Everyone has been calling for it.

It has just not happened.

It is harder to do than in the united states.

In absolutely.

That excerpt we had, carlos ghosn looking for a trigger in the auto industry.

What could be, elimination of overcapacity, or do you have to wait until the european economy turns around before there is any meaningful improvement in the automaker's? it has to be both.

The capacity situation has to be addressed.

The economy is what moves it along.

We saw this in the u.s.. took care of the capacity issue, and then got the economy rolling.

And it has not been released from here in the u.s., but we have improved had, employment, lower interest rates.

We had a lot of pent-up demand that help to spur the markets.

There are a lot of economic factors that have to help on the upswing while you are dealing with restructuring, or shortly thereafter.

The europeans wish they had a situation as good as we have here in the u.s. thank you.

Sometimes when you look past the had lines you can find a surprise.

That is what we found when we look past the friday jobs report.

?

This text has been automatically generated. It may not be 100% accurate.

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