Blog: Europe: thoughts on currency movements
Dave Leggett | 16 January 2015
Interesting news today that Ford is significantly raising output of the Fiesta in Germany in Q1 (other models, too, but mainly Fiesta). The move prompts a number of thoughts. Fiesta prospects really must be good, despite the fact that it is in the late stage of its model cycle (next Fiesta expected in 2016). More generally, it might mean that the European car market isn't as bad as some people think, with 2015 growth looking more solid.
Another point, though, might be that the latest weakness of the euro currency versus sterling makes it even more attractive to up shipments to the UK market. Ford, remember, is the UK market leader and the Fiesta is the number one selling model in the UK car market (by quite a margin). Maybe Ford wants to be a little aggressive in the UK market with the Fiesta - give it a real good go in its last year or so - just as Vauxhall pushes new Corsa and eyes the possibility of giving Ford 'a run for its money' in the small car segment, as Vauxhall's MD recently put it to me.
And other European OEMs might also be eyeing the UK market afresh on latest currency movements, especially the French as their domestic market looks weak. It could give the UK car market a bit more volume in 2015.
While thinking about currencies, one other thought. How will the Swiss car market look this year after its whopping currency appreciation versus the euro (Swiss central bank's cap on the euro/Swiss Franc exchange rate now removed) this week? It might get a short-term boost and anyone selling in large numbers there can look forward to a windfall gain (assuming the Swiss economy doesn't experience broader turbulence that negatively impacts car sales). I expect there will be renewed interest in Swiss sales in some OEM offices...
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