Booming China auto industry faces over-capacity (AFP)

China should end preferential policies for automotive companies in order to curb over-capacity in an industry where sales jumped 55 percent in August, a government official said.Chen Bin, a top official at China's economic planning agency, said booming auto sales were leading to blind investment in the industry, which could result in annual production capacity of over 31 million units by 2015.

PARIS (AP) — The Geneva Motor Show has long had a reputation as one of the glitziest stops on the global auto show circuit — the place to unveil luxury models and out-of-this-world fantasy concept cars. But this year the dire state of the European auto industry will hang over the exhibition halls. Hit by fleeing customers, struggling economies and idle production lines, the region's carmakers need to make tough decisions if they are going to survive.

LONDON — Europe’s enduring economic slump has left its auto industry hurting with sagging sales forcing prices down and inventory up, even after thousands of factory jobs have been cut.   Mid-level manufacturers such as Renault and Fiat are struggling, with PSA Peugeot Citroën in February reporting a record 2012 loss of $6.5 billion. Higher-end companies are, however, faring somewhat better.  

Ron Rowland submits:U.S. investors somehow survived for 25 years with just one automotive fund. In the last 10 days their choices jumped to three. Global X Advisors rolled out the newest entrant, the Global X Auto ETF (VROM) last Thursday (5/19/11).

Ed. note: Cross-posted from U.S. Department of Labor's "Auto Communities" blog by Matt Erskine, Acting Assistant Secretary of Commerce for Economic Development (EDA) We all know the situation a few years ago when President Obama took office: the American auto industry was shedding jobs by the hundreds of thousands and General Motors and Chrysler were in financial crisis. In the year before GM and Chrysler filed for bankruptcy, the auto industry lost more than 400,000 jobs. Had President Obama failed to act, conservative estimates suggest that it would have cost at least an additional million jobs and devastated vast parts of our nation's industrial heartland. But that did not happen because the president quickly intervened to save the U.S. auto industry from collapse. Today, GM, Ford and Chrysler have all returned to profitability.President Obama's decision to respond so boldly was about more than the auto companies. It was about standing behind the countless workers, communities and businesses—large and small—that depend on the automotive industry. It was also about revitalizing American manufacturing.Across the administration, federal agencies have outlined an agenda to support growth, job creation, and competitiveness in U.S. manufacturing. The U.S. Commerce Department's Economic Development Administration (EDA) has a strong track record of working with automotive communities to develop plans for economic recovery. The agency's efforts to help revitalize the nation's auto industry have been significant in Fremont, California, where a large auto assembly facility operated by the New United Motor Manufacturing, Inc. (NUMMI) was shut down in early 2010. The plant had employed nearly 5,000 workers, with thousands more dependent on it. The blow to the local economy was severe.

Cross post blog by Amy Brundage, White House Deputy Press Secretary for the Economy