Stephen Odell, head of Ford of Europe, has urged Europe’s politicians, business leaders, academics and regulators to create market conditions that enable Europe’s automotive industry to flourish. He also warned that unbalanced free trade agreements threaten the struggling European auto industry’s future recovery.
Speaking at a conference at the Cranfield Business School, Odell warned that the European motor industry is struggling amid a 22% decline in overall sales in the past five years. Predicting only sluggish market growth ahead, he urged policymakers not to jeopardise any recovery by imposing poorly drafted regulations and free trade agreements.
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Odell’s remarks echo those of the European carmakers’ trade body ACEA. ACEA has said that it wants Japan to eliminate non-tariff barriers to trade in cars before any agreement on EU-Japan free trade. It has also said that regulatory vehicle standards in Japan should be harmonised in line with EU standards.
Odell noted, in his speech, that EU regulations make an average car approximately twice as expensive as it otherwise would be – impacting the competitiveness of European-based manufacturers.
Besides his pleas to policymakers to listen to the European industry’s concerns, Odell also said that that Ford’s restructuring efforts would deliver sustainable profit margins of 6-8% in the medium term.
As part of that revival, he pledged that:
- Ford would launch more than fifteen vehicles in Europe in the next five years, most of them powered by British-made engines;
- Engines produced by Ford in the UK could power one third of all Ford vehicles globally today;
- Improved marketing and sales management would cut surplus inventory;
- Ford productivity would be enhanced by removing surplus manufacturing capacity.
Highlighting the British government’s emphasis on free trade during its G8 presidency, Mr Odell also warned that unbalanced free trade agreements with South Korea had further exacerbated surplus capacity in Europe, and failed to reduce trade imbalances with South Korea.
If a planned free trade agreement with Japan was similarly poorly implemented, it could threaten a European manufacturing recovery still further.
Faced with those challenges, Mr Odell said Ford would invest in new technologies to enhance product-appeal; seek out better qualified engineers to drive European innovation; and relentlessly focus on manufacturing efficiency.
Odell also spoke about the skills deficit in the UK and emphasised the importance of a workforce with the right skills and qualifications to the industry. He called upon the British motor industry and British manufacturing as a whole to ‘do more in the interests of schoolchildren’ in order for them to go on to fulfilling careers as scientists and engineers.
He concluded his address, saying he was confident European – and UK – manufacturing could survive under the right business conditions.
“We expect Europe’s volume carmakers, preferably encouraged and aided by Brussels, to follow the hugely successful American example and do what everybody knows needs to be done: to restructure, to cut excess manufacturing capacity, to reinvigorate their product ranges. And to develop industry-leading technology for the world.”
