But that is not necessarily a bad thing, according to BMW senior vice-president of importer markets Kay Segler. After the attrition, only the strongest will survive, and there will be 'more space' for them.
'It is sorting time now,' he told The Straits Times. 'The strong ones are the ones remaining after sorting time.'
He described the process as 'a healthy restructuring' that will claim some companies. 'It will start with the small ones,' he said, declining to name names.
According to industry watchers, brands that are among the most at risk now include Hummer, Saab, Jaguar and Volvo.
Mr Segler said mergers and acquisitions (M&As) are unlikely in the current environment.
'When two weak partners merge, it does not make them strong,' he said. 'And if one partner is strong, it (merger) will make it weaker.'
All recent M&As have unravelled or are unravelling, including marriages between BMW and Rover, and Daimler and Chrysler. The only exception seems to be the union between Renault and Nissan.
Mr Segler said the financial crisis will not blow over any time soon, but added that like all previous crises, it will end.
'When I was here during the Sars outbreak in 2003, I was staying at the Goodwood Park Hotel, and I think I was one of only five guests.
"I remember thinking, 'Will the hotel industry collapse?' Well, the hotel industry did not collapse."
Mr Segler said the biggest challenge the auto industry faces is tightened credit. This, he added, is affecting companies across all segments - from luxury brands to mass-market players.
And it affects buyers, sellers and carmakers alike.
'The basic demand for cars is not gone,' he said. 'It's just that not many people can buy cars without taking a loan.'
The impact of this credit squeeze is palpable. For the first two months of the year, BMW global sales were 25 per cent down, Mercedes about 30 per cent down, and Audi, 20 per cent.
For other makes, contractions were as big as 50 per cent.
Mr Segler said BMW was among the first to respond to the slowdown, starting early last year.
'We've trimmed our workforce by 7,500, or about 7 per cent,' he said.
Production runs at plants were cut back correspondingly.
'If you don't react, then you'd have cars stockpiling at your dealerships,' Mr Segler said. 'And you can't afford that.'
He indicated that many manufacturers are stuck with high stock levels, and this could have an indirect impact on others that do not have a stock problem.
'My worry is that all these cars will be dumped on the market, and that will lead to price competition,' he said.
BMW will also stop sub-contracting the manufacture of its X3 sport utility vehicles to Austria's Magna Steyr group. It will move X3 production to its American plant in Spartanburg, South Carolina.
The move is to retain as many jobs as possible within the company.
Magna Steyr, however, will not be left high and dry. It will make the yet-to- be-revealed Mini Crossover, a smaller volume car. BMW owns Mini.
Turning to the topic of government aid, Mr Segler said he was against direct handouts, which 'disturb' perfect competition.
He said indirect incentives, such as rebates for scrapping old vehicles, are more palatable. These rebates can be used to buy only a newish car. In Germany, the car to be bought has to be less than a year old.
'The government earns VAT (value-added tax), so the exercise is revenue neutral,' he said. 'But unfortunately, most of the cars bought were small cars. And the beneficiaries were the Korean, French and Italian carmakers.'
Even though the German companies did not gain much, Mr Segler said 'the total effect was still positive'.
He added that the crisis has one positive effect on BMW. 'We were slipping a little into complacency. Now, with the crisis, the fighting spirit is back.'
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