Timing for the start-up of European production on the next generation Ford Mondeo is a ‘critical variable’ in the company’s decision-making over its European capacity footprint, according to an analyst at LMC Automotive.

The model was unveiled last month at the Paris Motor Show as part of Ford’s product-led strategy to hold its sales up in the challenging European market. And just last month it seemed that Ford was going ahead with plans to make the model in Genk, Belgiun, from the autumn of next year (now thrown into doubt ahead of a planned announcement on Genk’s future tomorrow). 

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

However, while some slipping of the timing on the Mondeo may have (intentionally or not) created space for Ford to have a rethink, a decision needs to happen imminently and could also have pushed Ford to consider closing Genk – an assembly plant with a very low rate of capacity utilisation under existing production plans.

The schedule for the installation of new tooling for the next Mondeo and the lead time ahead of commercial production means that Ford needs to decide now whether to put the model into Genk or make it at an alternative plant.

“Our understanding is that the timing on the start of European production for new Mondeo has slipped from April to September of next year,” says Arthur Maher, LMC analyst. “That means that Ford really has to decide now on where it will locate that model. It may be a decision that has been rolled into a wider reassessment of the company’s European manufacturing footprint in the context of projected rates of capacity utilisation across Ford’s European production network over the next few years and given the forecast continued weakness of the European car market.”

The position of Genk looks bleak according to LMC’s analysis of the plant’s output and rate of capacity utilisation.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

LMC estimates annual capacity at Genk of around 270,000 units. However, production last year totalled just 178,127 units (to yield a 66% rate of capacity utilisation). This year capacity utilisation at Genk is forecast to decline further to around 50% as production falls to around 134,000 units. On current plans LMC forecasts capacity utilisation at Genk to fall further in 2013 and it is projected at a level of just 50% in 2017. LMC estimates that capacity utilisation needs to be around 80% for a plant to be ‘rule of thumb’ healthy and around the point of break-even.

See also: BELGIUM: Twitchy Europe unions eye Ford Genk meeting