Ford: Europe’s Car Market Has Hit Bottom

After more than five years of steady contraction, European auto sales are at or near their nadir, according to Stephen Odell, CEO of Ford Motor Co.'s Europe, Africa and Middle East unit.

The stabilizing market means Ford won't need to make further capacity cuts in Europe, Odell tells reporters. He says the company's planned closings of two plants in England and another in Belgium by 2014 will cut its capacity by about 350,000 units, or 18%.

Since 2007, vehicle sales in Europe have plunged one-third to 12 million units, by Ford's calculation. But Odell doesn't expect the region to reduce its remaining 2 million units of excess capacity because of government and union opposition.

The result will be continuing intense competition as carmakers laden with heavy vehicle inventories battle for a share of Europe's diminished market, he predicts. Ford anticipates that its production cuts and launches of new vehicles will enable it to resist pressure to fully match heavy discounting by rivals.

The unit aims to break even by 2015 after a projected $2 billion (€1.5 billion) loss this year.