Spending cuts hurt Ford's European sales

Concern about European government spending cuts hurt car demand in the second quarter, adding to uncertainty over the recovery of the region's auto market, said Stephen Odell, the head of Ford Motor Co.'s European operations. "The second quarter's been a bit more difficult as we start to see austerity measures kicking in and concerns about sovereign debt," Odell said in an interview in London. "It's pretty difficult to predict where the industry is going to go." Ford, which has its Eur-opean headquarters in Germany, projects that industry-wide sales in the region will range between 14.5 million and 15.5 million vehicles this year. Sales in 2010 totalled 13.8 million, according to data from the European Automobile Manufacturers' Association. Ford expects to offset the industry weakness in part with new products and should benefit from "full availability" of the C-Max minivan and Focus compact, Odell said. Article continues below Ford plans to beef up its factories in the UK, investing £1.5 billion (Dh8.81 billion) over the next five years, Odell said at the event. Ford itsalf will provide more than half of the funds, with EU grants and a £340 million guarantee from the UK making up the balance. Ford also plans to create "several hundred" jobs in Europe this year. Ford's market share in Europe through May slipped to eight per cent from 8.6 per cent, dropping it below General Motors Co., which garnered 8.6 per cent of car sales in the region, according to data from the regional trade group. Meanwhile, Ford confirmed plans to ship its Ranger pick-up to 148 countries from South Africa under a $500 million export programme. Ford over the past two years has expanded its assembly plant in Pretoria to an annual production capacity of 110,000 vehicles. Last year, it sold about 48,000 vehicles from its South African operations into southern Africa.