Ford Expects No Gains from UK Market

10/17/96

Reuters has reported that Ford Motor Company Ltd, in the UK has predicted flat sales in Britain for 1997. Ian McAllister, chairman and managing director of Ford U.K., said that weak sentiment was the primary reason for low interest among UK consumers over the last three years: "People were badly bitten by the recession and have become cautious about their own personal balance sheets."

He said consumer worries such as negative equity on homes and the recessionary hangover would have to be settled before the private car market took off.

Industry analysts have attributed most of the growth in the UK car market to companies buying cars, rather consumer purchases. McAllister said company fleet sales would remain a priority for Ford in the coming year but added, "we will reduce our exposure to the heavily discounted rental market."

The UK chief acknowledged that the outlook for the European car industry was not very promising, indicating that excess market capacity had fuelled downward pressure on profit margins for all carmakers. McAllister agreed with the assessment that the perceived growth in car sales across Europe for 1996 was distorted by government incentives in countries like France and heavy discounting by most car makers.

Paul Dever -- The Auto Channel