Even the launch of new products, such as the Kuga, hasn't offset Ford's European sales slide.
With its 2012 losses already forecast to approach the $1 billion mark, the situation in Europe continues to get worse for Ford Motor Co.
The Detroit maker revealed its July sales in 19 key European countries slipped to their lowest level in 17 years – with demand for the first seven months of 2012 off by 12.3%. That was significantly worse than the overall 7.1% market dip for the calendar-year-to-date, suggesting Ford’s earlier projections might not be dire enough.
“Overall industry sales remain very weak across much of Europe given the economic environment,” warned Ford European sales chief Roelant de Waard.
The European market has been tumbling for a number of years, though the pace of that downturn has severely worsened since Greece, Italy and other members of the EU began seeking economic bailouts. Even the Continent’s powerhouse, Germany, has begun to slip as the crisis worsens.
Hyundai is, so far, the only major maker to counter the sales slump – primarily due to a new EU – Korea free trade agreement that helped open up the market and lower duties on Korean-made products.
While some manufacturers, such as Volkswagen, have been able to offset European losses with earnings from other parts of the world, a growing number of makers have been sliding deep into the red. General Motors is anticipating losses will top $2 billion on its Opel subsidiary. France’s PSA Peugeot Citroen is expected to seek a government bailout.
And Ford is struggling to keep its European operations from slumping deeper. On the upside, the company did post sales gains in Russia and the U.K. during July, but sales for Europe overall totaled an anemic 83,100.
Complicating matters, manufacturers have been ramping up rebates and incentives while also lower prices in the hope of stealing share in the declining market. That puts further strains on profitability, analysts caution.