Ford Europe is continuing to eye production capacity and costs, a top executive has said.
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After being worried about insufficient capacity to match demand for some model a year ago, Ford’s European president and CEO John Fleming said at an event coinciding with the Geneva motor show.
Fleming also said he hoped for more leadership from the European Union to address the industry downturn, such as a broad vehicle scrapping programme to support new car sales and a freeing up of credit for consumers and dealers, Reuters reported.
“I’m really worried at the moment that we are not getting that,” Fleming said. “Country-by-country, governments are really spending time worrying about their own industry.”
The EU has been intended to open markets and level the playing fields, something that isn’t happening, he said.
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By GlobalData“We are starting to see nationalism, protectionism and that is a concern,” Fleming said.
According to the report, Ford had already cut capacity in Europe and in other regions, with the first quarter production plan at 325,000 units, a reduction of 214,000 vehicles from a year ago.
“The question is, how much further do you need to cut and I don’t know that,” Fleming told Reuters. “We will just have to wait and see what happens to the market.”
Production plans depend very much on overall market sales, which at the moment appear “artificially high” for February due to adoption of scrapping programmes by some countries, Fleming said.
Unofficial reports suggested the German market was up 21% year on year last month.
“If scrappage schemes stop, and the other underlying business hasn’t improved, than I do think that we will continue to see capacity [having] to be reduced,” Fleming added.
Ford expects industry sales in the European region it uses to calculate sales could have a 15m unit annualised rate of sales because of the scrappage programmes, he told Reuters.
Ford expects 2009 industry sales of 12.5m to 13.5m units in that region, including medium and heavy duty trucks.
