Roelant de Waard, sales chief at Ford of Europe, warned that although the European car market might have finally halted its decline, the price war between carmakers won't stop until sales in the region surge significantly. Volume carmakers' sales results suggest that they are closer to posting a breakeven in Europe than earlier believed, although they still have to offer steep discounts and heavy incentives following the market dropped to less than 14 million vehicles in sales.
De Waard told Reuters in an interview that from a pricing perspective, he is not "seeing any relief at the moment yet." Ford posted a 9-percent surge in sales in its 19 core European markets to 90,000 vehicles in July, thanks to strong demand for its B-Max small MPV. De Waard told Reuters that it seems that all customers know that auto industry in Europe and the region are in a recession, so they are "expecting very good deals."
Reuters saw confidential research indicating that discounts by mass-market brands hiked 17 percent in May 2013 across Europe's five biggest markets. According to de Waard, much of the problem was toted on unused production capacity, with factories able to build over 4 million vehicles beyond the demand in Europe. He noted that auto industry in Europe had demand of 18 million vehicles, and there was overcapacity even at that level.
He remarked that while there has been activity by Ford and other carmakers to adjust capacity, it will take a while before the excessive capacity will be actually gone. He noted “it's really the end of next year that the first plants really close." Ford recently shut down two ancillary plants in the United Kingdom and is planning to close its Genk assembly line in Belgium at the end of next year. [source: Telegraph]