Supply will still exceed demand in Europe despite the industry-wide output cuts of 1.5 million to 2 million vehicles that have occurred or are announced, according to Ford of Europe chief executive Stephen Odell. Ford expects the European auto industry to build at least 4 million vehicles annually more than market demand even after the production cuts are realized.
Ford expects to post $2 billion in losses in Europe in 2013. The carmaker is shutting down three plants and cutting 6,200 jobs in Europe by 2014. Odell told reporters that Ford is reiterating its sales forecast for total industry sales of 13.5 million vehicles in 19 countries in Western Europe, where the carmaker posted a 6.4-percent year-on-year jump in sales in 2013. In contrast, the auto industry as a whole posted a 6.6-percent drop in new vehicle sales in the region.
Odell said that industry sales rate in Europe in June 2013 may have jumped to 13.8 million, which would exceed Ford's full-year forecast of up to as 13.5 million deliveries.
Odell said the carmaker still aims to achieve a breakeven in Europe by 2015, noting that the industry is "starting to show signs of stability.
He said that there are some good indications for a possible upturn. Ford has no plans to further cut its production capacity in Europe, as it is already at the point where it has "no more capacity announcements to make," according to Odell. He said that they feel that they have taken appropriate action. One of the main worries that Ford chief executive Alan Mulally is aiming to resolve is the current loss-making ways of its European unit.