Ford Europe sees no quick end to price war

Thu Aug 15, 2013 7:48am EDT
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By Christiaan Hetzner and Deepa Seetharaman

FRANKFURT/DETROIT (Reuters) - Europe's car market may have finally stopped shrinking, but a manufacturers' price war will not let up until sales increase significantly, a senior Ford (F.N: Quote) executive said.

Second-quarter results have suggested mass-market carmakers are closer to breaking even in Europe than previously thought.

But they still have little option but to offer buyers hefty discounts and incentives after the regional market fell from peak sales of 18 million in 2007 to less than 14 million now.

"From a pricing perspective I'm not seeing any relief at the moment yet," Roelant de Waard, sales chief of the U.S. carmaker's European business said in an interview with Reuters.

Ford earlier reported sales in its 19 core European markets rose 8.7 percent to 90,000 vehicles in July driven by demand for its B-Max small MPV.

"All customers seem to be aware that we are in a recession - as an industry, as a region - so they're expecting very good deals."

Confidential research seen by Reuters indicated that discounts by mass-market brands jumped 17 percent in May from a year earlier across Europe's five biggest markets.

De Waard said much of the problem stemmed from unused manufacturing capacity, with plants able to produce in excess of 4 million vehicles beyond what was required to meet European demand.   Continued...

Roelant de Waard speaks at the launch of Ford's new environmentally friendly cars that run on bio ethanol fuel at the British International Motor Show in London July 18, 2006. REUTERS/Luke MacGregor