Ford boss mattes warns against price wars in the auto industry

Ford germany boss bernhard mattes warns of ruinous price battles in the european auto industry. The overcapacities of the mass manufacturers are continuing to increase and the situation is getting worse, the german manager of the u.S. Car manufacturer told the financial times germany (friday edition). According to the report, ford expects competition to continue to increase.

According to mattes, the oversupply will be countered by a significant drop in demand. "We estimate that the european market will shrink by 1.3 million vehicles this year. That is around 8.5 percent fewer than in 2011." the development had already impacted ford in the first quarter. Sales across europe were down by 60.000 cars across europe, and the us group had posted losses in europe. Peugeot and fiat had also sold significantly fewer cars.

The weak economy in the southern european countries is weighing heavily on sales by carmakers with a strong presence there. Due to the debt crisis, public budgets also have less leeway for concrete aid programs such as the scrappage scheme in germany in 2009. The eu commission and the european industry association acea are currently discussing possible aid. Experts agree that factory closures are necessary to prevent price erosion. Fiat boss sergio marchionne had also recently called for a 20 percent reduction in capacity.

Mattes, on the other hand, is satisfied with business in germany. In contrast to the trend in europe, ford’s sales in germany were 259 percent higher than in the previous year.The ford c-max sold around 18 percent more than the previous year’s figure of around. Nevertheless, the carmaker announced short-time work for the plant in koln last week. After the summer vacations, a decision will be made as to whether additional days of short-time work should be worked, mattes told the newspaper.

In addition to its koln plant in germany, ford also operates an important plant in saarlouis in the saarland region of germany. At its german plants, ford manufactures primarily for export; according to mattes, more than 80 percent of production goes abroad, making the production sites dependent on the european market.

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