US: Ford of Europe chief sees recovery ahead in Europe
Ford Europe chief Stephen Odell knows that cars in the European car parc are ageing and will need replacing eventually. The question is, just when will consumers feel okay about doing that and move en masse?
After several years of below normal car markets in Europe, replacement demand should provide a market boost in 2014 according to Ford of Europe boss Stephen Odell, speaking in Detroit.
In remarks reported by Bloomberg, Odell said that new car sales in Ford's 19 main European markets may rise almost 6% in 2014 as customers opt to replace ageing vehicles.
He said that overall deliveries in Europe may jump to as many as 14.5m in 2014 from an estimated 13.7m in 2013.
Odell maintains that vehicles on European roads have been in use for an average period of 7-8 years, longer than is normal. "There is a replacement climate, for sure," Odell told Bloomberg.
"There will be a point where the average age will trigger something, and that really is what's feeding our view of a modest recovery," he said.
Analysts are projecting a slow recovery to Europe with car sales in Western Europe thought more likely to rise by up to 3% in 2014. Car sales in the east of the region ought to grow more quickly however, helping to explain Ford's 6% projection for its 19 European markets.
While the overall economic picture across the region points to a weak recovery path for car demand, analysts also say that there comes a point at which consumer confidence reaches a tipping point, car running costs go up and more cars start to be replaced with new. Some car markets are running so far below 'normal replacement' levels that such a trend - when it comes - could see some acceleration.