The steep contraction of Europe’s auto industry — which has trimmed sales, forcing carmakers to absorb punishing losses and slash production — appears to be reaching bottom, a key Ford executive said on Thursday.
Signs indicate the market for new vehicles in the eurozone has stopped shrinking, said Stephen Odell, executive vice president and president of Europe, Middle East and Africa, at a briefing at the automaker’s headquarters,
“It’s beginning to show signs of stability,” Odell said, though he cautioned the turnaround was unlikely to be swift.
“The European market should start growing next year,” but growth will be slow and modest over the next several years, Odell said.
He acknowledged Ford’s outlook is different than the one offered earlier in the week by Nissan/Renault chairman Carlos Ghosn, who said he was not sure the European market had actually bottomed out.
Odell said, while unemployment levels, at 12.2 percent, are “very bad,” even “unprecedented,” nevertheless, “most of the indices are pointing towards recovery.”
Vehicle sales in Europe are running at about 13.5 million units a year, well below the 18 million unit sales rate in 2007.
Ford’s European operations lost US$462 million in the first quarter, which was offset by profits of US$2.4 billion in North America.
“We still expect to be profitable in Europe by the end of 2015,” Odell said.
He declined to offer any guidance on second quarter financial results, but noted the company has now reached agreements with unions on closing two plants in Britain and one in Belgium.
The three plants are expected to shutter next year, he said.