Ford Sees Global Car Market Expanding by Up to 10%

Ford Motor logo on Ford buildingFord Motor (F) expects global demand for automobiles will grow by as much as 10% this year, spurred by economic recovery and steady demand in Asian markets, said a company executive Thursday in London.

"We see the economy improving, but the strength of the recovery in individual markets has been uneven," said John Fleming, head of Ford's global manufacturing, in a webcast from an analyst conference. While demand remain strong in Asia, it's moderating, said Fleming, formerly the automaker's top European executive.

To meet rising demand, Ford is expanding production in China by opening two new factories and is introducing eight new models in India. In Europe as well as the U.S., Fleming expects that auto sales will slowly gain momentum as credit becomes more readily available, but sales will still be hampered by high unemployment.

August Was Tough in the U.S.

In Europe, sales have been driven by so-called "scrappage" programs, similar to the "cash for clunkers" program the U.S. government instituted last year. With the European programs winding down, however, the market there is likely to weaken, Fleming said.

August was a tough month for auto sales in the U.S., and Ford was among those reporting lower sales compared to a year ago, when "cash for clunkers" was in full swing. The Dearborn, Mich., automaker reported sales fell 11%. Still, that was a better outcome than many of its rivals. General Motors reported a 25% drop in sales, while those at Toyota Motor (TM) fell by more than a third.

Ford is also the only U.S. automaker not to succumb to bankruptcy following the financial crisis two years ago, unlike GM and Chrysler Group, which were bailed out by the federal government. Ford's ability to stay afloat has engendered goodwill among buyers looking to still purchase American cars but who aren't willing to consider GM or Chrysler vehicles.

Shrinking for Profitability

In his presentation, Fleming noted that in the past five years, Ford has cut structural costs by some $15 billion and slashed its hourly workforce by half. The company also will have reduced North American production capacity by 40% by the end of 2011, he said.

Ford's restructuring has resulted in the sell-off of its stable of European luxury brands, such as Volvo and Land Rover, to focus more resources on the company's core Ford brand. To that end, Ford also said in June that it is shutting down the 70-year-old Mercury brand. Worldwide, the automaker has reduced the number of nameplates in its vehicle stable to 59 in 2008 from nearly 100 in 2006, and it plans further reductions.


Ford has also reduced its dependency on sales of less-fuel-efficient trucks in the U.S. Passenger-car sales now make up about 37% of its sales mix year-to-date, up from 32% in 2005. Accordingly, trucks as a percentage of sales have fallen to 36% from 44% in 2005, while utility vehicles have risen to 27% so far this year from 24% in 2005. Fleming said the shift reflects changing consumer demand.

Ford's plans also call for it to accelerate product development with the goal of bringing fresher models to showrooms with greater frequency, Fleming said.

Staying in Germany After All

In other Ford news, the automaker has canceled plans to move production of a small sport-utility vehicle from Europe to Kentucky, Bloomberg News reported, citing unnamed sources familiar with the matter.

Ford had planned to shift the Kuga model next year to Louisville from Saarlouis, Germany, to take advantage of lower labor costs and the weaker dollar. With the euro falling, the sources said, Ford now plans to continue producing the Kuga in Germany.

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Charlie

I wish Ford would build those new plants here and employ Americans. The American consumer has built FMC,and Ford should reciprocate by building its products here, employing Americans and supporting OUR economy. That's America's biggest problem, we import way too much, we export our jobs, and we don't build or manufacture anything anymore, we've lost the manufacturing base that built this country. I'm afraid it would take another Pearl Harbor event to fire our factories back up and show the world the industrial might this country is capable of.

September 10 2010 at 2:20 PM Report abuse +1 rate up rate down Reply
rgenec

I find it funny that people complain about Ford, but they are the only US auto company that pulled themselves out of the mess created by their legacy corporate managment and the unions. Now they are doing what they must do to survive and people whine about going overseas. They tried to make arrangements with the unions before they moved to South America and the unions saw Ford not taking bail-outs and finally making some money as a sign to try and gouge them out of more money. Also some of these moves are because that is where their new customers are. As far as I am concerned, Ford is the only remaining US auto brand since the other two are owned by the Government and it is clear from the sales numbers that most Americans would rather buy from a publicly owned company than a Goverment owned one.

September 10 2010 at 1:24 PM Report abuse +2 rate up rate down Reply
porge125

Sure FORD, send your production to foreign shores and forget the work forces in America. Thank the loyal Ford buyers by going out of the country to build your cars. I would never buy another Ford product built in a foreign country

September 10 2010 at 1:05 PM Report abuse -3 rate up rate down Reply
upedkk

Dear Frank S. Pedigo: U. S. Union workers do not build cars. They just sit in seats welded to the robots that build the cars and collect far too much money for nothing. Oh , sorry they do have to find there way to the robot production plant after leaving their favorit bar. Its not just that union workers are over paid it's that they can not be made to WORK. They are very good at picketing, but that does not take very much mental capacity. Government Union motors will probably go out of business if BO stays in charge.

September 10 2010 at 12:11 PM Report abuse +6 rate up rate down Reply
trshaf6

bought a new fusion in 2008,Not one problem at all.And is as good if not better than the reviews on it.Cant say the same for brother inlaws malibu.

September 10 2010 at 11:45 AM Report abuse +4 rate up rate down Reply
Frank S. Pedigo

If Ford is dumb enough to cut labor in the US then I will never buy another Ford product again . I cant see why they would want to cut thier own throats like other companies have . I dont think these CEO`s understand that if you destroy your customer base for quick profit in the end you will be left with nothing .They need to ask themselves just how many people in India ,China and Mexico will buy all these cars and trucks at the pricese they are asking ? In Mexico for example where they build Chevy trucks who many Mexicans do you see buying new trucks ? None they dont have the money to because GM pays slave wages and charges union pricese . The same will come about in India and China .

September 10 2010 at 11:24 AM Report abuse -6 rate up rate down Reply
1 reply to Frank S. Pedigo's comment
chlemond

It's called capitalism. Ford's success (and that of any other non-subsidized business) is governed by the law of supply and demand. If demand goes down, production must follow and, unfortunately, so must any responsible company's payroll. If demand goes back up, the reverse will happen. The UAW has managaged to survive and prosper in just that environment for years. Bloated staffing in gigantic facilities turning out product that has no buyers is fiscally irresponsible. Bailout anyone?

September 10 2010 at 11:46 AM Report abuse +6 rate up rate down Reply
atlanticmold

if you can't make the payments then you should lose the car and your credit. you wouldn't like it if your employer stopped paying you for work already completed because he was ill or voluntarily decided not to pay you.

September 10 2010 at 11:20 AM Report abuse +4 rate up rate down Reply
Odessa Hickman

Ford stays afloat because they do not lose any money. If a buyer loses his job, becomes ill, or for some reason voluntarily return a car to Ford, Ford will auction the vehicle and sue the buyer for the balance. I'd like to see comments from others whose credit has been ruined by Ford.

September 10 2010 at 11:05 AM Report abuse -8 rate up rate down Reply
2 replies to Odessa Hickman's comment
trshaf6

about any creditor will do that.

September 10 2010 at 11:37 AM Report abuse +7 rate up rate down Reply
sss200

Looks like you ruined your own credit.

September 10 2010 at 12:36 PM Report abuse +3 rate up rate down Reply
atlanticmold

gm and chrysler = made in mexico. Investigate before you buy. gm trucks and dodge trucks. made in mexico. ford and toyota trucks = made in usa. good thing we bailed out gm and chrysler.

September 10 2010 at 11:04 AM Report abuse +6 rate up rate down Reply
1 reply to atlanticmold's comment
lilbjc87

Thats funny...there is a GM truck plant in Fort Wayne, IN and I know the Ford Fusion plant is in Mexico you dumbass.

September 10 2010 at 12:00 PM Report abuse -2 rate up rate down Reply
mike edwards

ford keeps bringing crap into the united states and putting there name on it like the fiesta bect

September 10 2010 at 8:58 AM Report abuse -11 rate up rate down Reply
1 reply to mike edwards's comment
themanindbox

I dont know if that is the case, i have owned 3 fords. One was a 1985 SVO which was a hunk of crap. Then i had a 93 Taurus wagon which went through 4 trannies in the 88K miles i owned it. Now i have an 09 Mustang Roush and honestly it is super tight and no issues yet. Although i dont drive it much either, as it is really just my weekend car. The new Fiesta is a nice car, its too bad it is a four door. If they had the Euro Spec 2 door in this country i would buy one tomorrow as a daily driver. But i learned one thing, Ford cant make an Automatic transmission, so if it ain't stick i would stay away from a ford.

September 10 2010 at 9:29 AM Report abuse -5 rate up rate down Reply