EUROPEAN ECONOMY IN DECLINE
Stocks of unsold goods on the shelves of manufacturers and retailers in Europe have increased for the first time in nearly two years, while total sales for the year 2002 barely rose.
Christopher N. Wilkins, President of BAST, a leading textile company in Belgium, declared:
To get an exact picture of the market of the last two or three years we need a breakdown of sales by customer and sales representative. Those numbers would show us whether or not the company has a product line that customers want to buy and sales reps want to sell.
About
half of all businesses in Denmark reported that their sales dropped
at least 15% as a result of
the international crisis after
September the 11th.
Although companies of all sizes felt the impact, it was small businesses, with their more limited financial resources, that were hit hardest. The costs of maintaining a sales force, for example, can be a barrier for many smaller companies. Besides, the European market is still fragmented into multiple languages, cultures, and legal systems. Therefore, to build sales volume quickly, many companies open subsidiaries abroad.
The decline in sales in the car industry in Italy was the result of the stronger Euro, the weak economic conditions found in Asia and Latin America and the crisis of FIAT which shut down some of its key manufacturing plants. The currency translation into the strong Euro is estimated to have cut reported sales figures by more than € 20 million.
A stronger Euro hurts sales overseas for European companies by making cars and other products more expensive. Analysts say international sales will probably only grow a modest 5 percent in the next 2 years.