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March 16, 2010

US: Orders slowing as incentives end – Ford

Industry-wide year on year vehicle orders in Europe were down as much as 30% to the end of February as buyers slow purchases without the lure of incentive programmes, Ford's European sales chief Ingvar Sviggum said.

Industry-wide year on year vehicle orders in Europe were down as much as 30% to the end of February as buyers slow purchases without the lure of incentive programmes, Ford’s European sales chief Ingvar Sviggum said.

“We are already seeing new orders begin to fall and heavy incentives increase,” Sviggum said in an interview with Dow Jones Newswires, referring to the ending of government scrappage schemes in many countries, including Germany. The UK scheme, already extended, ends on 31 March.

“Our sales were up in February but much of that was filling the orders from last year’s scrappage programmes,” Sviggum added.

Ford has estimated industry sales will drop as much as 10% to 15% this year, with the number of new vehicles sold at about 13.5m to 14.5m.

Dow Jones noted that Russia, which didn’t offer an incentive programme last year, launched its version of “Cash for Clunkers” on 8 March, offering consumers as much as US$1,700 to trade in and buy new. Sviggum said responses would be slower since the economy and added he expected to begin seeing some results next week.

Ford has an assembly plant in the St Petersburg region, assembling popular models for Russia such as the Focus and Mondeo.

Ford reported a 1.8% year on year increase in its vehicle sales in its 19 core European markets. It sold 93,200 vehicles, but market share edged 0.3% percentage points lower in the first two months of 2010, the report noted. Italy led Ford’s European sales results as volume increased by 3,800 vehicles to 22,000.

“It’s great to see that there’s still very strong demand for our latest products, and that our market share was pretty stable in February despite aggressive discounting by some of our competitors,” Sviggum said. “We understand the need to be competitive in the market, but we will not engage in actions that jeopardise the sustainability of our business or that devalue our brand.”

Sviggum said he knew of one competitor offering a 40% price discount on some vehicles.

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