The risk of Over-Production
The structural changes wich are taking place in Western Europe result mainly from the necessity of adapting production machinery to the new market conditions. Each firm is seeking to consolidate its position on the home market and to conquer as much as possible of the neighbouring markets wich are now accessible to it. But this indespensible adaptation calls for investments often on such a scale as to be within the reachof only the biggest firms. In this investment race the small firms often find themselves threatened and their only chance of survival lies in very intensive specialisation. Unapble to compete with the leading firms, they are obliged to limit their production to models abandoned by bigger rivals, for example sports or luxury cars. The question remains however as to wether the increase in overall production which will result from these massive investments is going to meet an actual demand. [..]
Furthermore, de inadequacy of the basic road networks and prohibitive taxation both help to restrict the potential market. Consequently, in spite of a certain increase in exports and inter-European trade, Western Europe is running the risk of over-production.
(published in The Automobile Year 1965-1966, 1965 Switzerland, and in the authors’s book L’Industrie automobile et ses Perspectives d’Avenir dans le Nouvel Equilibre européen et mondial, Impr. Ère nouvelle, 1966)
