(Refiles to insert word “AUTOSHOW” in headline)
* Abrupt end to incentives to cause ‘shock’ to industry
* Market conditions ‘not normal’
* No issue with proposed state aid for Opel
By Soyoung Kim
FRANKFURT, Sept 15 (Reuters) - Ford Motor Co (F.N) is asking European governments to keep incentives for consumers to scrap old cars because demand remains “very weak” and an abrupt suspension of the programs could lead to another sharp decline in sales, the head of Ford Europe said on Tuesday.
“It’s not a normal market. It’s not normal conditions,” Ford Europe Chief Executive John Fleming told reporters on the sidelines of the Frankfurt Motor Show.
“We will continue to ask them to keep it going until the underlying market improves, or as a minimum we could find a way to put a gentler wind-down so it does less of a shock to the system,” Fleming said.
New car sales in Europe have staged a slight recovery since June after a 14-month slump, fueled by state incentives offering cash bonuses to people who trade in old vehicles for new, fuel-efficient ones. Industry executives and analysts have warned of a second sales crash, with incentive schemes coming to an end after inflating sales in major markets.
Fleming said industry sales are expected to drop further in 2010 from this year’s already-depressed levels.
“I would assume that’s going to happen because the scrappage disappears, the underlying economy isn’t improving — there will be a gap,” he said.
Separately, Ford’s marketing and sales chief, Jim Farley, said U.S. industry auto sales were likely to be down anywhere between 30 and 40 percent in September from August, when the annualized sales rate jumped to 14.4 million units on the back of the “cash for clunkers” rebates.
Carmakers in Europe are closely watching potential changes to the industry landscape after General Motors Co [GM.UL] agreed to sell control of its Opel European unit to Canada’s Magna International MGa.TO last week — a deal that has drawn a political storm over 4.5 billion euros in state aid that Germany has pledged.
Fleming said Ford has no objection to financial assistance being provided to Opel or other competitors but added the European Commission and state governments must ensure a “level playing field” for all manufacturers. (Reporting by Soyoung Kim, editing by Matthew Lewis)