September 15, 2009 / 4:03 PM / 8 years ago

AUTOSHOW-UPDATE 1-Ford asks European govts to keep car subsidies

 (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)


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