Ford of Europe feels the full effect of the ending of scrappage schemes as new-car sales dropped by 17.2% in its 19 main markets last month. In a statement, Ford revealed that in the past 10 straight months, it recorded year-over-year monthly volume gains.
But in April, Ford's sales dropped to 101,100 in the 19 markets, when compared with the same month in 2009. Sales for the auto industry dropped 5.3% to 1.29 million, the first monthly decline in the industry this year.
Sales of Ford's smaller Fiesta and Ka models were boosted by the scrappage schemes but then they are now either finished or are being wounded down in the following key markets: Germany, the UK, France, Spain and Italy.
These programs, which were supported by the government, offered buyers with incentives to replace their older cars with new, more fuel-efficient models.
According to Ingvar Sviggum, Ford of Europe's head of sales and marketing, sales were lower last month because it chose not to offer incentives, like some of its rivals.
In a statement, Sviggum said that Ford took a conscious decision in April not to follow the market with the rationale that the expected drop in industry volumes after many of the scrappage schemes ended is likely to encourage some players to further increase their aggressive marketing incentives.
He added that Ford isn´t inclined to devalue [its] brand or hurt [its] residual values just to chase volume or share.