Europe:Ford may cut European production as sales decline
Wednesday, July 9, 2003
By Bret Okeson / Bloomberg News
Ford Motor Co., the world's second- biggest carmaker, said it may cut production at three factories in Europe after first-half sales of Ford-brand cars in the region fell 1.2 percent.
The carmaker sold 813,876 Ford-brand vehicles in the six months through June, it said in an e-mailed statement. The company may scale back carmaking at plants in Cologne and Saarlouis in Germany and Valencia, Spain, said Don Hume, a Ford spokesman in Brentwood, England.
Ford has already cut production of the Mondeo model by about 11,000 cars this year at its factory in Genk, Belgium, in response to lower demand. Rivals including Volkswagen AG and PSA Peugeot Citroen are offering discounts and special equipment to lure customers as the European market declines.
"Business is tough right now," said Peter Rieth, an analyst at ING-BHF Bank, who has an "underperform" rating on Ford. "Their models, particularly the Focus and Mondeo, aren't doing so well and the price pressure from competitors is continuing."
Other carmakers including volume manufacturer Volkswagen to luxury carmaker Porsche AG have cut production this year. In the first five months of 2003, total car sales fell 3.8 percent in Western Europe.
"We're reviewing our production," said Hume. "The automobile market has continued to deteriorate and we have to respond to the market."
Ford's vehicle sales in Western Europe fell 5.8 percent from a year ago in the five months through May, more than the market's total 5.2 percent decline. Sales of Ford's Jaguar luxury unit have fallen 25 percent and sales at the Land Rover sport-utility vehicle division have slipped 14 percent.
The German newspaper Handelsblatt today reported the company would cut production.
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My next Ford.....