The chief executive of Ford Motor said European market conditions were a “real concern” after the company recorded a 29 per cent year-on-year fall in European vehicle sales and the market contracted for the 11th consecutive month.
Speaking at an event in New York to launch the new Ford Fusion midsize car, Alan Mulally also dismissed speculation about his future at the company.
Ford’s sales in Europe fell by about 17,000 units over last August to 43,400 units, according to Acea, the European car industry association. Ford’s fall came against the backdrop of an industry-wide fall of 9 per cent in new car registrations in August to about 790,000 units, said Acea. The drop was the sharpest since February.
Ford said its sales drop – which reduced its market share by 1.6 percentage points to 6.5 per cent – was sharper than the industry average because it had declined to offer the same sales incentives as rivals.
Mr Mulally said Europe’s economy continued to slow down and that most of its countries were in recession.
“If you look at the automobile industry, it has gone from 18m units [a year] to less than 14m,” he said. “So this is a tremendous decrease in demand.”
It would be very important to match production capacity to meet demand, Mr Mulally said: “That’s the only way to make a return and continue to invest in products.”
However, Mr Mulally gave no details about where in Europe the company might close plants or cut back on production. Ford is considering closing at least one of its plants in Europe to cut costs, according to people familiar with its thinking.
The plant that produces its Mondeo model at Genk, in Belgium and its smaller plant making the chassis-cab variant of its Transit van at Southampton in the UK are believed to be likeliest to be cut in any restructuring of Ford’s European business.
Ford is also seeking to expand its European sales by launching 15 new or substantially revamped models in the market over the next five years. Mr Mulally defended Ford’s continuing heavy investment in the continent, where other carmakers, including General Motors, are similarly pursuing growth through investment.
“We’re very pleased with our position in Europe because we’re the number two automaker throughout Europe,” he said. Ford is the continent’s second-largest car brand after Volkswagen, according to Acea, but PSA Peugeot Citroën, is second to VW as a group.
Mr Mulally also dismissed speculation that he planned to step down, saying he had “no other plans”.