Wandering around the vast halls at the Frankfurt motor show, it didn’t take long for one big trend to become apparent. Many of Europe’s hard-pressed mass-makers are on a mission to head upmarket. Here’s why.

There are two giant hurdles in front of companies including Peugeot-Citroën, Vauxhall-Opel, Ford of Europe and Renault’s European operations, among others. Firstly, the European new car market has slumped from around 16 million vehicles in 2007 to an expected 13 million in 2013.

This has led to massive over-capacity and under-utilized factories, which in turn leads to unprofitability. According to a report this week by Alixpartners, only 60 per cent of European car factories are operating at over the minimum profit-making capacity of 70 per cent. That means around 40 per cent of factories are loss-making before the manufacturer faces the next hurdle.

Pricing pressures on the mass-market brands have also become unsustainable. While the premium brands can (mostly) demand near full retail pricing, they also benefit from a healthy take-up of highly profitable optional extras by customers, the mass-makers are engaged in a hard-fought market, which sees cars as discountable consumer durables.