Europe’s car market will stay “depressed” for the next few years, but prospects are good for expansion in the US and Asia-Pacific, Ford’s new chief operating officer said on Wednesday.
In comments also echoed by Toyota’s top US boss, Mark Fields said the US auto company will double its market participation in some segments in China in the next three years.
The European market is at its weakest since 1994, Fields — who takes up his new global executive role at the company this week — told reporters at the Los Angeles Auto Show.
“The industry is very, very tough right now. Our view going forward for our business is that the industry will stay depressed, or low trend levels, for a number of years,” he said.
To counter this Ford has launched a “transformation” plan including manufacturing cost savings in Belgium and the UK, while focusing more on commercial and small utility vehicles.
“I’m very optimistic that in working our transformation plan, we will get the business back to sustainability and our objective is by mid-decade to get the business in Europe back to profitability,” Fields said.
Longer-term, Ford hopes to achieve operating margins in Europe of between 6 percent to 8 percent, he added.
In North America, Fields was cautiously optimistic, as the US economy recovers from the global depression.
In the Asia-Pacific region, he said that Ford hoped to start seeing returns on its investments in facilities and products.
“We’re starting to see some very good early signs of that right now. In the third quarter [in] Asia-Pacific we had a record market share, there was about 3.1 percent, in China we had a record market share,” of 3.6 percent, he said.
“With the growth of the products that we have in China going forward we will effectively double our market participation in segments in China between now and 2015,” Fields said
Fields also praised the administration of US President Barack Obama, which he said had set up the regulatory framework for the US auto industry — almost destroyed by the 2008 financial crisis — through until 2025.
“From that standpoint even previous to the [presidential] election we had certainty around that, and we’re off and running in our plans to meet those requirements,” he said.
Since Obama’s re-election “it is encouraging to see that with the administration ... they’re working with the Congress in a bipartisan way to address some of the economic issues which are so important to all of us,” Fields said.
Toyota Motor Sales USA president Jim Lentz echoed Fields’ optimism that the US economy recovery will drive industry growth.
“Fueled by these positive economic trends, the auto industry is gaining momentum,” he said in a speech to the LA Auto Show, which opens to the public today and continues through Dec. 9.
Separately, General Motors has said one of its Chinese joint ventures will invest 6.6 billion yuan (US$1 billion) in a new plant to meet growing demand for commercial vehicles.
The venture between GM and Chinese partners SAIC Motor (上海汽車) and Wuling Motors (五菱汽車) aims to open the 400,000 vehicle-a-year plant in the southwestern metropolis of Chongqing in 2015, according to a GM statement released late on Wednesday.
The plant would be the joint venture’s third in China, after others in the eastern city of Qingdao and in Liuzhou in the south, it said.