European Losses Sting, Ford Cuts Back
Europe’s car market has been contracting every month for nearly a year. Ford (NYSE:F) sales tanked 29 percent year-on-year in August, joining a cast of manufacturers including General Motors (NYSE:GM) reporting double-digit losses in the region. Both companies posted strong sales numbers in the United States and China, which are carrying the companies through the heavy European losses.
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Roelant de Waard, Ford of Europe’s head of marketing, sales, and service, said in a media release, “August was even slower than usual this year, and there was a lot of short-cycle business and heavy incentives that we decided to largely refrain from.” For example, Ford decided not to match competitors who were offering discount rates in August. Instead, they’re looking to quarter four and the launch of new vehicles to reclaim market share. The C-Max, Kuga Crossover, Fiesta, and the infamous Mustang are all slated for the area.
Ford is preparing to see upwards of $1 billion in losses in Europe. In order to cut costs, it has floated ideas about closing plants, but tough labor regulations make this difficult. Chief executive Alan Mulally told analysts in July, “Europe is a significant challenge due to a very tough external environment, a situation we expect to continue for the foreseeable future.”
The European Automobile Manufacturers’ Association has reported that the only market in Europe to grow between January and August of 2012 was the United Kingdom.
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