Apr.17 - Ford's European car registrations fell 15.9 pct in March as car sales for the region saw a sixth straight annual decline to a two-decade low. Julian Satterthwaite ask Ford's Europe CEO how he plans to deal with the downturn
Ford just can't seem to get a break in Europe. The parent company may be enjoying a revival in the U.S. but its European offshoot is bleeding cash and struggling with overcapacity. A previous pledge to cut jobs and close plants may now not be enough. The situation in Europe certainly isn't helping companies like Ford. The latest figures show sales down by 15.9 percent in the euro zone in March, and there is little sign of an upturn in the second half. That exactly mirrors Ford's own dip in sales over the period. And, though it's a slower rate of decline than in the first two months of the year, it hardly suggests a turnaround. Worse still, Ford isn't making any money on the vehicles it is selling, with the company predicting losses of two billion euros in Europe this year. Ford Europe CEO Stephen Odell admits there's no sign of any upturn. (SOUNDBITE) (English) STEPHEN ODELL, FORD EUROPE CEO, SAYING: "The first quarter was about 13.3 million, 13.4 million, so you know still within the bandwidth of our forecast, but unfortunately at the lower end. A lot of hope that in the second half we'd start to see some gradual improvement. But you know with the unemployment at 12 million in the euro area, it doesn't feel like we're going to see that just for a while." Ford's problem certainly isn't a lack of new vehicles. Around 40% of its sales this year will be new models, and there are more in the pipeline. Later in the year the new EcoSport model will give Ford a presence in the fast-growing market for small SUV-like cars - or compact crossovers in industry jargon. The new Kuga SUV is also selling well, with Ford even increasing production at its Valencia factory. Nor are the problems confined to Ford, of course. Even European number one Volkswagen - once seen as untouched by the crisis - saw its sales fall 15 percent over the period. The difference is that VW remains profitable and thus better placed to ride out the storm. As European number two, Ford has a tough dilemma. Should it cut prices to keep market share, at the risk of tumbling revenues? Or should it hold firm on prices at the risk of tumbling sales? Either way an upturn in Europe's economy can't come soon enough.