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Ford and Opel on opposite sides in European market

Worker assembles Audi A3 at production line of German car manufacturer's plant in IngolstadtFord vehicle registrations in June climbed by 6.9% from a year earlier, compared with a 7.2% combined decline for GMs Adam Opel and Vauxhall brand registrations and the 6.3% contraction in Europe as a whole, according to the European Automobile Manufacturers Association. The association collects data only on new passenger-car registrations in the European Union plus Iceland, Norway and Switzerland.

The Ford positive change is recent. Its new registrations were down 9.9% for the first half, worse than the 6.8% decline at Opel, with GMs brands still outselling Ford. Both trailed the regions market leaders, Volkswagen AG, PSA Peugeot-Citroën and Renault SA.

Ford is benefiting from reduced inventories earlier in the year and from its exposure to the U.K., the auto makers biggest European market. The pounds relative strength against the euro and the payouts that British consumers have received from British banks and insurers for their marketing of financial products have British demand for new cars up 13% in June and 10% for the first half.

Asked whether Ford can continue to withstand the industry fall in Europe, Mr. Odell said for the Wall Street Journal: “I dont think we can defy gravity, but I feel very good about where we are in Europe in terms of new products and our inventory levels.”

In contrast, demand in Opels main market, Germany, has fallen sharply this year, with registrations loss of 4.7% in June and declining 8.1% in the first half.

The auto maker is also struggling to revive consumer interest in its cars, which is the most serious problem of all for the firm as it suffers from an image problem compared with rival German brands such as Audi, BMW, BMW.XE -0.30% and Mercedes-Benz.

Opel is relying on its new models which it says are gaining traction with consumers as it has beefed up its marketing efforts in Germany and other countries. Opel spent €25 million ($32.7 million) on advertising for the Adam line, a new compact car, alone, topping spending for all models industry-wide, according to data compiled by research firm Nielsen. Opel also is confident sales of its new Mokka small SUV will benefit from the consumer appetite for those vehicles.

Both car manufacturers said they expect a year of heavy losses. Peugeot and Fiat SpA based in Italy, and heavily exposed to France, Italy and other Southern European markets where sales have collapsed, are also losing money in the region with factories running well below full capacity.

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