Ford expects to lose money this year on its European sales and refuses to rule out cutting additional jobs as it tries to reduce costs, a company spokesman said on Monday in a report from Associated Press (AP).

"I don't think we ever expected to be in the black this year. Things like the weak euro and the strong dollar and sterling are bound to have had an impact on our European operations,'' Ford of Europe spokesman Don Hume told AP.

He refused to quantify the expected annual loss. Ford's losses in Europe increased 42 percent in the third quarter of the year to $US221 million.

The Financial Times reported on Monday that Ford could lose $US1 billion on its European operations this year, but Hume said he didn't "recognise'' that figure.

According to AP, Ford of Europe aims to save a total of $US1 billion in costs over a five-year period by trimming 10 percent from its annual expenses, starting this year.

It has cut about 500 jobs so far by closing plants in Portugal, Poland and Belarus and is also cutting an additional 1,400 jobs at its factory in Dagenham, East London, where it plans to phase out car production altogether, Hume said.

"But that's essentially it,'' Hume told AP. "We don't have any surprises up our sleeves.''

However, he refused to rule out further job reductions.

Ford employs a total of 126,000 people in Europe, including workers at its subsidiaries such as Jaguar Cars and Aston Martin Lagonda in Britain and Volvo Cars in Sweden.

Like other carmakers in Europe, Ford is struggling with production overcapacity in a highly competitive market.

Ford faces additional pressure on profits because it sells British-built cars for euros in continental Europe. The euro has lost value against the pound, making it more expensive for Ford to pay its British suppliers in pounds.

Ford is scaling back its capacity to "a realistic level,'' while also pursuing "an aggressive brand-building strategy'' by introducing 45 significant new products over the next five years, Hume told AP.

The company is on track to meet its 10 percent cost savings target for this year, he said.