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GM Closing Factory in Germany Seen Emboldening Others: Cars

General Motors Co.’s move to shutter the first German car factory since World War II addresses only a fraction of the supply glut hobbling the European auto industry.

“One would need to close at least one factory per volume manufacturer in Europe, which would be about five factories in total,” said Philippe Houchois, a UBS analyst in London, referring to Renault SA, PSA Peugeot Citroen, Fiat SpA and Ford Motor Co. as the other four companies needing to shut plants.