Ford Sees Europe Growth Setting Stage for Eventual ProfitHans Nichols
Ford Motor Co., the second-biggest U.S. carmaker, is forecasting sales growth in Europe next year as demand for new models helps narrow its loss in the region.
“Our expectation is to get back to profit as soon as possible” in Europe, Chief Executive Officer Mark Fields said today in a Bloomberg Television interview at the Paris Motor Show. “We do expect to improve next year pretty significantly, but still at a loss” in the region.
Ford cut its global earnings forecast on Sept. 29 and said its European operations will miss a target of becoming profitable in 2015 because of a drop in Russia’s car market and low interest rates in the region that are raising pension costs.
“A little bit of weakness in the past couple of months” in European demand also prompted the Dearborn, Michigan-based company to scale back forecasts, Fields said. He declined to specify a time frame for reporting a profit.
Car-industry executives are predicting Europe’s automotive market, which reached a two-decade low in 2013 after a six-year slide, will expand by at least 3 percent in 2014. In contrast, industrywide demand in Russia is estimated to fall more than 10 percent as that country’s territorial conflict with Ukraine hurts economic growth.
Ford is forecasting that Europe’s car market will expand to 14.8 million to 15.3 million vehicles next year from 14.5 million to 14.6 million deliveries in 2014, Stephen Odell, head of the company’s business in the region, told reporters in Paris.
Demand is “probably not getting back to pre-crisis levels any time soon,” Fields said in the interview.
The U.S. manufacturer is at the Paris show to present the sixth generation of the 50-year-old Mustang sports car, the model’s first version to be sold in Europe. Ford is also promoting the updated C-Max van and 7-seat Grand C-Max version.
“It all comes back to making sure you have compelling products to grow your slice of the pie, and that’s our intention,” Fields said.
Russia remains likely to become Europe’s biggest car market “somewhere down the road,” and Ford is taking “the long view” as it continues to invest there, Fields said.